On Monday, Byju's, a highly valued startup, is expected to pay the $40 million instalment of its highest unrated loan of $1.2 billion. Additionally, the ed-tech startup is expected to pay its quarterly interest payment on June 5 deadline, according to people familiar with the matter.
If Byju's fail to make the quarterly interest payment, it will result in a default on the loan, which has been identified as the primary source of the struggling company's financial difficulties.
The loan is the largest unrated debt by a startup ever, recorded for a startup, amounting to $1.2 billion. Byju's laurels changed after the reopening of schools post-pandemic. The decline in the demand for online tutoring during the pandemic has significantly impacted the company's financial stability, prompting the need for such restructuring efforts. The company, previously recognized for its exceptional growth under the leadership of former teacher Byju Raveendran, has been actively seeking negotiations with creditors to restructure the loan. After the decline of the pandemic-era boom in online tutoring, the company's profit crashed significantly.
According to data compiled by Bloomberg, the loan accounted for a record low of 64.5 cents a dollar in September, is now quoted at around 78 cents.
The company has failed to meet the required deadlines for submitting financial accounts for the year to March 3. Additionally, its offices were searched by the agency that investigates violations of the nation's foreign exchange policies.