Lenders of the ed-tech firm Byju’s are asking for up to $200 million (about Rs 1,600 crore) in prepayment for the restructuring of a $1.2 billion (9,600 crore) loan, according to a report by the Economic Times (ET). In addition to $200 million, lenders are asking for a higher rate of interest. According to the report, the company has volunteered to raise the interest rate by about 200 basis points (bps), but it has not agreed to the prepayment clause so far. One basis point is a hundredth of a percentage point.
The amount lent to Byju’s is currently under review. The report says the world’s most valuable ed-tech start-up Byju’s has borrowed money from various lenders, including a number of US-based hedge funds.
Sources told the ET, “The prepayment is becoming a sore point in negotiations, as a section of lenders are refusing to play ball. However, it is possible that the lenders may finally agree to reduce the quantum of prepayment.”
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Byju’s is required to provide the lenders with a fortnightly update on the amount of cash the company has in reserve. According to the report, Byju’s currently has $650 million in overseas accounts and roughly Rs 1,500 crore (almost $183 million) in cash in India. Additionally, Byju’s is close to completing a $600-700 million investment round using a combination of convertible notes and equity. It is anticipated that some new investors would join the existing ones in this financing round.
Last week, Byju’s appointed former Vedanta Group executive Ajay Goel as its new chief financial officer. “As CFO, Ajay will be responsible for overseeing financial strategy and management for Byju’s. He will work closely with the founders and the senior leadership on strategy development, capital planning and financial analysis,” the company said.
Reports suggest that Byju’s hiring a CFO was one of the terms for renegotiating the $1.2 Bn term loan.