Education startup Byju’s has decided not to make further payments on a $1.2 billion loan following a dispute with lenders. This has led to a tussle and the tussle could jeopardize the future of one of India’s most high-flying startups.
Byju’s did not pay $40 million in interest on Monday, according to people with knowledge of the matter. The company said in a statement on June 6 that it has filed a complaint with the New York Supreme Court regarding the loan.
“Given that legal proceedings are ongoing 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 BTill the dispute is decided in court, TLB will not repay the lenders as well as any interest will not be paid.
Byju’s was trying to strike a deal with creditors to restructure debt with lenders after the online tutoring boom fizzled out in the pandemic and its financials deteriorated. But creditors seeking quick repayment scrapped the long-running talks.
Sources have told on the condition of anonymity due to a private matter that the payment was not made till 6 pm on June 5 in New York. Sources said some lenders are looking at options to address the possible payment default.
The company, headed by former teacher Byju Raveendran, had missed the deadline for filing of financial accounts. Its offices were investigated by an Indian agency probing violations of foreign exchange policies.
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