Byju’s obligated to repay $1.2 billion with interest, says US lenders

The US lenders of Byju’s parent company Think & Learn have said that the troubled edtech firm must repay the borrowed $1.2 billion along with interest.

According to these lenders, Byju’s has not made any contractually due payment in more than 17 months.

“Neither Byju Raveendran (founder) nor the Insolvency Resolution Professional (IRP) has the authority to disqualify any term loan lender – and even if they did, Byju’s would still be obligated to repay the full amount of the loan plus interest. Any argument otherwise is illegitimate, and Byju knows it,” the steering committee of the ad hoc group of term loan lenders to Byju’s Alpha Inc said in a statement.

The lenders have issued this statement in response to a PTI report in which Raveendran claimed that Think & Learn may not be required to repay any amount of the disputed $1.2 billion Term Loan B (TLB) due to the current "behaviour" of Glas Trust, which represents the US-based lenders. Raveendran said that the insolvency resolution professional (IRP) has verified Byju's debt claim, which now stands at Rs 20 crore.

“Majority lenders today hold more than 64% of the TLB…Byju’s claim that he either does not know who the lenders are or intends to pay primary lenders is illogical and false. He has not paid any principal or interest – be it to majority lenders or those who purchased the loans in the secondary market,” they added.

On September 3, the committee of creditors (CoC) held its first meeting where the IRP for Byju’s removed Glas Trust from the committee after concluding that it does not represent the minimum 51% of lenders in the consortium that provided a $1.2 billion term loan to Byju’s.

Glas Trust had moved the National Company Law Tribunal (NCLT) on September 4 against the IRP for Byju’s. However, the NCLT refused to stay the CoC proceedings as the Supreme Court had allowed its constitution on August 21.

ET had earlier reported that the Supreme Court had agreed to hear an appeal by Glas Trust, opposing a Rs 158-crore settlement arrived at between Byju’s and the Board of Control for Cricket in India (BCCI). It is expected to hear the matter on September 17.

“Almost all key personnel have abandoned Byju’s, including the CEO, CFO and General Counsel, and it has now seen a second auditor resign in less than two years due to Byju’s inability to explain away the whereabouts of the $500 million, among other reasons,” the lenders added.

On September 7, ET reported that MSKA & Associates, an affiliate of BDO International, the auditing firm for Byju's, had stepped down as statutory auditor due to the management's lack of cooperation, difficulty in getting necessary numbers and information for a thorough investigation, and the emergence of an issue that had to be reported to the MCA per the Companies Act.