Ed-Tech Giant Byju's has refused to make any further payments to lenders of a $1.2 billion loan. The company said in a statement today, June 6 that it has filed a complaint concerning the loan to the New York Supreme Court.
"Given that legal proceedings are now on foot in both Delaware and New York, it is clear that the entire TLB is disputed," the company said, referring to the $1.2 billion term loan B. "As such, BYJU'S cannot be expected to and has elected not to make any further payment to the TLB lenders, including any interest, until the dispute is decided by the court."
"Byju's remains financially robust with significant cash reserves," it said in its statement. "It remains open to discussions with the TLB lenders."
Byju's had been trying to strike a deal with creditors to restructure the loan after the pandemic-era online tutoring boom tapered off and crimped its finances. But creditors demanding an accelerated repayment scrapped the long-running negotiations.
Yesterday the Ed-Tech firm was expected to pay the debt amount to meet the June 5 deadline. Failure to pay the loan means the $1.2 billion loan will now be default.
Earlier the firm has missed the deadlines to file financial accounts for the year to March 31 and its offices were searched by the Enforcement Directorate (ED) officials that violates of the nation’s foreign exchange policies.
A lawyer for Byju’s said in a US court last month that the company would get “a large capital infusion” soon that would allow it to pay down the loan. Byju’s had offered to increase the coupon on the loan due 2026 by as much as 300 basis points and prepay part of the debt to renegotiate the agreement after it missed a deadline to file audited financial results.