Byju's, lenders agree to complete loan amendment by August 3

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Byju's, the world's most valued edtech, and more than 85 percent of its lenders have agreed to work towards completing the term loan amendment before August 3, which comes as a major relief for the company.

"The steering committee (the “SteerCo”) of ad hoc term loan lenders, who collectively own more than 85% of BYJU’S $1.2 billion term loan, today announced that it and BYJU’S have agreed to work collaboratively toward a signed and completed term loan amendment (the “Amendment”) prior to August 3, 2023. Successful execution of the Amendment would immediately solve for the loan’s acceleration and end all open litigation while avoiding further enforcement actions," a statement released by the lenders said.

The development would bring a great deal of cheer to Byju's, which is currently facing a number of challenges, including accounting irregularities, tussles with lenders, mass layoffs, and mounting losses.

Byju's offices in Bengaluru were searched by the Enforcement Directorate (ED) in April under the provisions of the Foreign Exchange Management Act (FEMA). The company has yet to file audited results for FY22 (2021-22).

For FY21 (2020-21), Byju's reported a huge jump in losses to more than Rs 4,500 crore, while its revenue dropped marginally, surprisingly, as FY21 was the first year of Covid that gave online learning companies a shot in the arm.

The edtech company is also yet to close a long-pending funding round, which is a much-needed infusion that will help the company tide over an immediate liquidity crunch.

Earlier in the day, Moneycontrol also reported that the company had given up office space in Bengaluru as part of another cost-cutting initiative, following thousands of layoffs earlier this year.

Byju’s also had come under the scanner of the Employee Provident Fund Organisation (EPFO) for irregularities in provident fund (PF) payments.

On July 22, Moneycontrol reported that the company held an emergency town hall with Byju’s Tuition Center (BTC) employees, where it committed that it would not be doing any other layoffs at BTCs. BTC employees were planning a pan-India protest on July 25 amid speculation of more layoffs.

Byju's touched a new high in March last year when it raised a massive $800 million round at a $22-billion valuation. The company, which counts backers like Peak XV Partners (formerly Sequoia Capital India), Prosus and Sofina among others, recently was in deep waters after the resignation of its auditor, and the departure of three key investor board members.

Also read | Behind the scenes: What happened between Byju’s and board members?

Byju's fair value was also marked down internally twice by BlackRock, the world's biggest Asset Management Company (AMC). BlackRock has currently pegged Byju's fair value at $8.4 billion, about 62 percent lower than its last valuation of $22 billion.

Founded over a decade ago by former teacher Byju Raveendran, Byju’s has raised over $5 billion, most of which was in the past five years.