In a sudden turn of events, the lenders of India’s highly-valued edtech platform Byju’s have discarded talks to restructure its loan amounting to $1.2 billion. Multiple media reports stated that the talks were called off as the creditors sued Byju’s for hiding $500 million of funds, it recently raised.

The start-up led by Byju Raveendran was in talks with these creditors for a month to restructure the loan. He proposed to hike the interest rate by 200-300 basis points. However, the lenders asked the edtech unicorn to pre-pay $200 million with a high-interest rate. 

According to a report by the Economic Times (ET), these investors include a lit of US-based hedge funds. 

“The prepayment is becoming a sore point in negotiations, as a section of lenders is refusing to play ball. However, it is possible that the lenders may finally agree to reduce the quantum of prepayment,” a person, who was aware of the development, told ET a month ago, requesting anonymity. 

Since the middle of 2022, Byju’s has been in the news for the wrong reasons. According to its much-delayed audit reports for the financial year (FY) 2020-21, the suffered a Rs 4,500 crore loss. In October 2022, the company announced a five per cent rationalisation in its 50,000 global employee bandwidth. Raveendran also received a summon from The National Commission for the Protection of Rights (NCPCR) for the malpractices conducted by its sales team. Citing a media report, the body stated, “As the Commission has come across a news article wherein it has been pointed out that the sales team of BYJU'S is indulging in malpractices to lure parents into buying their courses for their children. It has also been mentioned in the news report that some customers have claimed that they were exploited and deceived and had put their savings and futures in jeopardy.”