Negotiations between Byju’s, India’s most valuable startup, and its creditors to restructure a $1.2 billion loan have collapsed, dealing a blow to the troubled edtech firm.

What Happened? Sources familiar with the matter told Bloomberg that the talks were abandoned after the creditors filed a court case, alleging that Byju’s had concealed $500 million of raised funds. Lenders can now sell the firm’s term loan B securities.

This development poses a fresh challenge for the prominent tech company, which had been attempting to appease creditors through prepayments and higher coupons as part of the loan restructuring.

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While the steering committee of lenders has discontinued the negotiations, Byju’s will make separate efforts to engage with each lender independently for renegotiating the loan terms, one source told the business publication. The company is required to make an interest payment on the loan by June 5.

Byju’s had proposed increasing the coupon on the loan due in 2026 by up to 300 basis points and making partial prepayments as part of the renegotiation, following a missed deadline for filing audited financial results.

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