According to media reports, Byju’s, India’s most valuable startup, expects to make a quarterly interest payment of around USD 40 million on a loan that has been at the focus of the embattled firm’s financial woes.
The edtech company expects to pay on Monday to fulfil the June 5 deadline, reports added. The situation is still fluid, and plans are subject to change. Failure to pay by that date results in the default of the USD 1.2 billion loan.
The USD 1.2 billion debt is the largest unrated loan ever made by a startup. After the decline of the pandemic-era surge in online tutoring gave a blow to its finances, the once high-flying company managed by former teacher Byju Raveendran had been attempting to reach an agreement with creditors to restructure the debt.
According to Bloomberg data, the loan, which hit a record low of 64.5 cents on the dollar in September, is now trading at roughly 78 cents.
Making the coupon payment on schedule will allow the company enough wiggle room to await “a large capital infusion” that its lawyer says will be used to pay off the loan. According to the firm, the corporation is current on all debt payments, and any failures should be deemed technical breaches of the loan arrangement.
The company missed deadlines for filing financial statements for the fiscal year ending March 31, and its offices were raided by India’s agency that investigates infractions of the country’s foreign exchange laws.
The creditors demanding quicker payments called off the long-running talks, as reported last week. According to the reports, the lender consortium has signed a cooperation agreement that binds them to act jointly in discussions.