BYJU’S seeks easier terms against its $1.2 billion loan, claims report

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A Bloomberg report suggests that online edtech start-up BYJU’S is attempting to restructure its $1.2 billion debt as it struggles to deal with heavy losses and cost-reduction goals. The report further states that Dikacorn has appointed a consultant to discuss with the creditors the changes in the covenants of Term Loan B.

People familiar with the matter also told the news agency that discussions on more generous terms, including lower coupons and longer repayment time, are ongoing and no final decision has been taken.

India’s most valuable unlisted start-up, BYJU’S finally announced its audited results for FY21 on September 14, 2022 after a delay of 18 months. The parent company, Think & Learn Pvt. Ltd, widened its consolidated losses nearly 20-fold to Rs 4,588.75 crore in FY21 from Rs 231.69 crore in FY20. Its revenue from operations increased marginally to Rs 2,280.26 crore in FY11 from Rs 2,189 crore in FY10.

Sources told Bloomberg that amid all that has happened, creditors are growing concerned about the company’s ability to repay and many have sold off debt.

Besides, the three-month LIBOR has increased by more than 21 times this year, making loans costlier for the Bengaluru-headquartered firm. LIBOR stands for London Interbank Offered Rate. It is the globally accepted major benchmark for interest rates. It indicates the cost of borrowing between banks. People cited in the report said the margin on the loan was increased by an additional 50 basis points this year after its parent company, Think and Learn Pvt, failed to get a rating.

The debt is trading at 80 cents on the dollar on Wednesday after hitting a record low of 64.5 cents in September, according to data compiled by Bloomberg.

business today The company was reached but it declined to comment.

Read also: BYJU’s expects 3X revenue growth in FY22, losses to halve

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