Indian edtech major Byju's has signed a tentative agreement with its Term Loan B (TLB) lenders, who together own 85 per cent of the $1.2 billion Term B loan. The agreement will help the company to rework its loan pact. 

According to a report by The Economic Times (ET), the company and its lenders will work together for a signed and completed term loan amendment before August 3, 2023. There is a possibility that the investors may drop their demand for accelerated payment if the loan terms are successfully reworked, sources told ET. The ongoing litigation can also come to an end. 

A Byju's spokesperson denied offering any comment to ET on this matter. 

The development came nearly a month after Byju's missed the deadline of repaying $40 million interest of its $1.2 billion TLB loan. The company also filed a lawsuit against the US-based investment firm Redwood, accusing it of leading a bunch of investors to play predatory tactics against the edtech firm. 

“On 3 March 2023, the TLB lenders unlawfully accelerated the TLB on account of certain alleged non-monetary and technical defaults. On the back of this unconscionable acceleration of the TLB, the TLB lenders undertook unwarranted enforcement measures, including seizing control of BYJU’S Alpha and appointing its own management. Not resting content with this, the TLB lenders (acting through their agent, GLAS Trust Company) commenced litigation in Delaware in an attempt to lend credence to these actions,” the company said in a statement. 

Responding to this, the investors termed the lawsuit meritless. 

“BYJU’S’ meritless lawsuit against its term loan lenders is simply an effort to avoid complying with its obligations, including making contractually required payments. The lender group, composed of 21 highly respected global institutional investors, has sought to work constructively with the company over the past nine months to cure its numerous defaults and will continue to do so in good faith. However, in the event Byju's intentionally remains in default, the lender group reserves all rights available to it to enforce the credit agreement," the lenders stated.