Byju’s has filed a legal complaint in the New York Supreme Court against the acceleration of its $1.2 billion (₹9,913.5 crore) term loan as the world’s most valuable edtech firm tries to fend off its debt troubles.
What Happened? Byju’s is suing lender Redwood for allegedly predatory practices and seeking the latter’s disqualification, the company said in a statement to Moneycontrol.
This development comes after months of dispute with lenders and a separate lawsuit accused Byju’s Alpha Inc, a Byju’s subsidiary, in a Delaware court of concealing $500 million.
The recent filing in the New York Supreme Court challenges the term loan acceleration and calls for the disqualification of Redwood entities, asserting that the entire loan is now under dispute. Byju’s has announced its decision to withhold further payments, including interest until the court resolves the matter while emphasizing its financial strength and willingness to engage in discussions with the lenders.
Byju’s claims that the TLB lenders unjustly accelerated the loan based on alleged non-monetary and technical defaults, but the Delaware court rejected the lenders’ attempt to strip the company of its contractual right to disqualify lenders involved in opportunistic trades.
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The edtech giant said that despite this, lenders, including Redwood, persisted in demanding immediate payment, even though the acceleration is being contested in court, while the TLB lenders’ agent refused to disclose the lenders’ identities.
According to media reports, Byju's had previously been preparing to pay about $40 million (₹330.42 crore) in quarterly interest on a $1.2 billion (₹9,913 crore) loan. At the same time, the company pushed back the IPO timeline for its unit, Aakash, to 2024 as it faces a major cash crunch.
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