Byju's puts forth a new proposal to repay its loans to lenders
- Indian educational tech giant Byju’s has surprised lenders with a repayment proposal, aiming to settle its $1.2 billion term loan in under six months.
- Under this plan, the company is willing to pay back $300 million of the distressed debt within three months upon acceptance of the proposed amendment. The remaining amount would be repaid over the following three months. Lenders are currently reviewing the proposal and seeking further information regarding the funding source for the repayment.
- Byju’s and its lenders have been locked in a year-long conflict marked by unsuccessful negotiations to restructure its loan agreement. The company’s decision to skip an interest payment on its term loan, one of the largest such loans among startups globally, has aggravated the dispute and contributed to its growing financial difficulties.
- Byju Raveendran, the founder of the eponymous learning app, launched the platform in 2015. The company, formally known as Think & Learn Pvt. Ltd., secured the five-year loan in 2021 to support its expansion beyond India.
- In August 2015, Byju’s introduced ‘The Learning App’ to the educational landscape. In 2017, the company expanded its offerings with the launch of the Byju’s Math App for children and the Byju’s Parent Connect app.
- By 2018, Byju’s had garnered an impressive user base of 15 million, with 900,000 of them being paid subscribers, marking a significant milestone to become India’s first edtech unicorn.
- By 2019, the platform had successfully reached students in non-metropolitan and rural areas, constituting 60% of their user demographic.
- In January 2022, Byju’s made a strategic move by joining forces with other leading edtech companies like Simplilearn, Unacademy, upGrad, PrepInsta Prime, and Vedantu to establish the Internet and Mobile Association of India’s India EdTech Consortium.
- Then, in March 2022, Byju’s ventured into a new chapter by signing a contract with the Qatar Investment Authority to establish a new edtech company and an R&D center in Doha, further expanding its global presence and impact in the field of education.
- In August of 2022, Bloomberg News released a report stating that the ministry of corporate affairs had issued a letter to Byju’s, demanding an explanation for the failure to submit its audited financials for the fiscal year ending in March 2021. Byju’s provided clarification, attributing the 17-month delay to the complexities involved in consolidating the financial records of its acquisitions during that particular year. Remarkably, despite the delay, Deloitte bestowed a clean audit upon the company.
- In November 2022, a significant number of Byju’s employees voiced their grievances regarding perceived unfair treatment by the company. Reports suggested that Byju’s had terminated the employment of more than 5,000 individuals.
- In April 2023, the Enforcement Directorate (ED) made a public announcement regarding its execution of searches at Byju’s offices, citing actions taken under the Foreign Exchange Management Act. During these searches, the ED disclosed the seizure of ‘incriminating’ documents.Hence Byju’s is eager to arrive at a swift resolution and implementation of the proposed amendment; but it remains uncertain whether an agreement will be reached. If it works, it would be a pivotal step in the broader effort to revive the startup, which was once valued at $22 billion and is now struggling with financial challenges..Byju's puts forth a new proposal to repay its loans to lenders
