Byju’s Faces Critical $40 Million Payment Deadline on $1.2 Billion Loan
- ByStartupStory | June 5, 2023
Byju’s, India’s highest-valued startup, faces a crucial deadline as it is anticipated to make a quarterly interest payment of approximately $40 million on a $1.2 billion loan by June 5. This loan stands as the largest ever undertaken by a startup, yet failure to meet the instalment deadline would result in a loan default. The company’s profits have notably declined following the online tutoring surge during the pandemic, prompting negotiations with lenders to explore loan restructuring options.
The creditors have entered into a cooperative agreement, binding them to collaborate in negotiations. As a result, the consortium has chosen to expedite the repayment process, thereby discontinuing the prolonged discussions. Back in September, the loan value had significantly dropped to 64.5 cents per dollar. However, it has since rebounded and is currently quoted at 78 cents.
Byju’s legal team is of the opinion that making the coupon payment on schedule will provide the company with sufficient time to await a substantial capital infusion, which can be used to repay the loan. The company asserts that it is up to date with all debt payments and considers any defaults as technical violations of the loan agreement.
Previously, Byju’s had faced challenges meeting deadlines for submitting financial reports for the fiscal year ending on March 31. Additionally, the company’s offices were searched by the Indian agency responsible for investigating violations of the country’s foreign exchange laws.
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