According to a report, edtech giant BYJU'S has proposed raising the interest rate on its $1.2-billion term loan as part of renegotiating debt-financing agreements. According to the Economic Times report, this has been caused by the holdup in disclosing both the FY21 results and the FY22 financials.
However, individuals familiar with the situation told ET that the $22 billion-plus edtech company is in talks with its creditors about increasing interest by at least 200-300 basis points (bps). By 2026, the loan must be repaid.
In November 2021, the loan was increased at Libor plus a 550 bps variable interest rate. In addition to the 550 bps, extra interest is being considered by BYJU'S. 0.01 percentage points is one basis point. This negotiation has taken place after lenders recalled loans as a result of a delay in providing FY21 audited figures. The modifications are related to the FY22 results as well, which have not yet been submitted to the Registrar of Companies (RoC).
Nonetheless, the report made it clear that revisions to the agreement do not constitute any form of failure on the side of BYJU. In reality, Byju Raveendran, the company's CEO, is actively involved in the discussions. According to the sources who spoke with ET, BYJU'S has also hired a number of individual consultants and law firms involved in the arrangement. After an 18-month delay, BYJU'S parent company, Think & Learn Pvt. Ltd., disclosed its results. Its combined losses increased nearly 20 times, from Rs 231.69 crore in FY20 to Rs 4,588.75 crore in FY21. Operations' revenue increased somewhat from FY20 to FY21, rising to Rs 2,280.26 crore from Rs 2,189 crore.
