A group of creditors to Byju’s, India’s most valuable startup, has asked the company to immediately repay part of a $1.2 billion loan they recently bought into as they renegotiate terms of the debt, according to people familiar with the matter.
According to the people who asked not to be identified because the information isn't public, the lenders have hired Houlihan Lokey Inc. to advise them on amending covenants after the edtech titan breached terms, including a September deadline for filing its results for the fiscal year ended March 31, 2022. According to them, Rothschild & Co. is representing Byju's in the talks.
According to two of the sources, the majority of the lenders in this group purchased the debt from primary holders in September, when the loan fell to a record low of 64.5 cents, and are hoping to profit from accelerated repayment. Byju's, Houlihan Lokey, and Rothschild officials declined to comment.
According to Bloomberg data, the loan was trading at 80 cents on the dollar on Monday, while similar debt from another Indian company, Oyo Hotels, is holding close to the issue price.
The renegotiated terms that Byju’s has already agreed with a majority of the lenders include providing monthly business updates, hiring a chief financial officer, and increasing the interest rate on the loan, the people said. The company is seeking to restructure the loan as it struggles with steep losses and meeting its cost reduction targets, Bloomberg News reported earlier this month.
However, a small group of creditors is still holding out asking the company, valued at $22 billion, to use its US unit’s cash reserves of about $850 million to prepay part of the year-old loan, the people said. The loan, priced at 550 points over Libor in November 2021, is one of the largest unrated term loan B offerings ever from a new-age company worldwide, according to JPMorgan Chase & Co., one of the deal’s bookrunners.