Byju's puts Great Learning, Epic on the block to generate $800 mn to $1 bn for loan repayment

Byju's puts Great Learning, Epic on the block

Byju's, India's most-valued startup, has put two of its biggest assets—upskilling platform Great Learning and California-based reading platform Epic—on the block to generate about a billion dollars as it plans to repay the $1.2 billion term loan B in the next six months.

Byju's, which paid about $375 million for acquiring Epic in 2021, is expecting to garner about $400-550 million, a person with direct knowledge of the matter told Moneycontrol. The company has received three term sheets for Epic and the deal talks are at advanced stages, the person said, requesting anonymity.

The company has also put Great Learning up for sale and has held preliminary talks with potential buyers, expecting to fetch about $400 million from the sale of the upskilling platform, the person said. Byju's had paid about $350 million to acquire Great Learning in 2021. The discussions for the sale of Great Learning are still in the early stages.

Byju's has been working with bankers for the two deals, the person cited above said. The company has also engaged in discussions with sovereign wealth funds for a potential equity fundraise. To be sure, Byju's has been looking to raise at least $700  million since February this year and has held discussions with Middle East-based sovereign wealth funds, Moneycontrol previously reported.

Byju's did not respond immediately to a query sent by Moneycontrol.

If the sale of Great Learning and Epic goes through, it will provide Byju's with the financial resources it needs to navigate its imminent liquidity challenge. This includes repaying the full term loan B and ongoing negotiations with Davidson Kempner, a US-based asset management company.

Davidson Kempner provided Byju's with $250 million in structured debt in May, based on the future cash flows of Aakash Educational Services, the company's largest asset. However, the US-based AMC withheld approximately $150 million because Byju's negotiations with its lenders did not progress well.

Byju's also had a technical default on the Davidson Kempner loan. This prompted Byju Raveendran to raise funds to repay it, in order to avoid losing control of his most valuable asset, Aakash Educational Services. Byju's had offered Aakash's shares as collateral for the Davidson Kempner loan.

Earlier in the day, Moneycontrol reported that Byju's offered to repay the entire $1.2 billion term loan B (TLB) to its lenders in under six months. The company is hopeful of repaying $300 million of the $1.2 billion loan in the next three months, contingent on lenders accepting its amendment proposal.