The $1.2 billion Term Loan B (TLB) saga is causing more headaches to the highly-valued global edtech firm Byju’s. Few days after the company filed a lawsuit in the New York Supreme Court, a group of ad-hoc lenders, who collectively own 85 per cent of the loan, issued a statement calling 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, comprised 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.

The development came nearly two days after the company filed a lawsuit against the US-based investment firm Redwood in the New York Supreme Court. The edtech decacorn accused Redwood of violating the terms of the TLB and purchasing a significant portion of the loan while primarily trading in distressed debt. In addition to this, the company also accused the US-based firm of leading a group of lenders to play predatory tactics against it. It also said that the TLB lenders attempted to deprive the company of its contractual rights to ‘disqualify’ them involved in opportunistic trades. 

“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,” it added in the statement.