Byju's intends to pay approximately $40 million in quarterly interest on a loan that has been a source of financial difficulties for the company, Bloomberg News has reported, citing sources familiar with the matter.
The ed-tech company plans to make a payment on Monday to meet the 5 June deadline for a $1.2 billion loan, as per the sources. Not paying on this day would mean defaulting on the loan.
Former teacher Byju Raveendran's once-thriving startup has been hit hard by the decline in online tutoring due to the pandemic, resulting in a $1.2 billion unrated loan — the biggest ever for a startup.
The company is now trying to restructure the loan with creditors to alleviate its financial situation.
But creditors demanding an accelerated repayment scrapped the long-running negotiations, according to Bloomberg.
As reported by insiders, the lender consortium agreed to act together in talks, signing a cooperation agreement.
The loan, once at a record low of 64.5 cents a dollar in September, now stands at about 78 cents, data from Bloomberg shows.
Making the coupon payment on time will allow the company to wait for a significant capital infusion, which can pay off the loan, as per the company's lawyer.
According to the firm, they are up to date with all debt payments, and if any defaults occur, it is merely a technical breach of the loan agreement.
The company failed to submit financial accounts for the year until 31 March on time and had its offices searched by a probe agency.
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