Byju’s firm is expected to pay the $40 million instalment of its highest unrated loan of $1.2 billion on Monday. The ed-tech startup needs to make the quarterly interest payment on June 5, which is also the deadline for the instalment.
If the company fails to make the quarterly interest payment, then the loan, which is at the centre of the beleaguered firm’s financial troubles, will default.
The $40 million payment is expected to be made on June 5, reported Bloomberg citing anonymous sources. The information is not available in the public domain. The situation is still fluid and the Byju’s payment plan can change as well, reported Bloomberg.
Also Read: BYJU’S refutes claims of hiding $500 million through US-based subsidiary BYJU Alpha
Byju’s firm didn’t respond to requests for comment about the coupon payment. Moreover, there were no comments on the issue by the representatives for Houlihan Lokey Inc. The company was hired by creditors to advise them on the loan.
The loan is the largest unrated debt by a startup ever. Byju’s laurels changed after the reopening of schools post-pandemic. The company’s profit jumped significantly after the company’s boom during the pandemic. After the decline of the pandemic-era boom in online tutoring, the company’s profit crashed significantly. That’s why Byjus has been trying to strike a deal with creditors to restructure the loan.
But creditors demanding an accelerated payment scrapped the long-term negotiations, according to a Bloomberg report. The lender consortium signed a cooperation agreement that binds them to act together in negotiations.
Earlier the mega loan accounted for 64.5 cents a dollar in September. But now, has increased to 78 cents, reported Bloomberg.
On-time payment, a ray of hope for the troubled startup
Paying the coupon amount on time will be a game changer for Byjus as it will help the company to steal some time for a “large capital infusion“. According to the company lawyer, the large capital infusion will be used to pay down the loan.
Byjus is current on all debt payments, and any default on payment should be considered a technical breach of the loan agreement.
Notably, Byjus has missed deadlines to file financial accounts for the year to March 31. Another blow to the firm was audited by an Indian agency to investigate violations of Indian foreign exchange policies.
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Updated: 05 Jun 2023, 10:27 AM IST