Byju's, lenders postpone legal battle; aim for out-of-court solution

Edtech company Byju’s and its term loan B lenders have decided to postpone an ongoing disagreement in the US courts until 6 October. This extension aims to provide more time to achieve an out-of-court resolution, according to a document seen by Mint.

- Ranjani Raghavan & Varun Sood

This conflict can be traced back to 5 June, when Byju’s lodged a case in the New York Supreme Court. The objective was to stop the lenders from accelerating a $1.2 billion loan. The lenders contended that Byju’s had violated multiple covenants, including its failure to submit financial statements for FY22, consequently seeking expedited loan repayment.

In its complaint, Byju’s also sought to disqualify Redwood Capital, a term loan B lender, citing its distressed investor status to claim that it was ineligible under the loan terms.

Byju’s also announced its decision to withhold interest coupons on the loan until the dispute was resolved, but subsequently initiated negotiations with the lenders for an out-of-court settlement.