BYJU’S is offering to pay a higher interest rate for its $1.2-bn loan: Report

Edtech giant BYJU’S has offered to raise the rate of interest for its $1.2-billion term loan as part of renegotiating debt-financing arrangements, according to a report. The Economic Times report revealed that this has been prompted by the delay in releasing the FY21 results and the FY22 financials as well. 

In addition, the edtech company, which is valued at about $22 billion, is in discussions with creditors on raising interest by at least 200-300 basis points (bps), sources familiar with the matter told ET. The loan has to be paid by 2026.

The loan was raised in November 2021 at Libor plus a floating interest rate of 550 bps. The additional interest being discussed by BYJU’S is on top of the 550 bps. A basis point is 0.01 percentage point. This negotiation has come in the wake of lenders having recalled the loans triggered by delay in furnishing FY21 audited results. The changes are also linked with the FY22 results, which are yet to be filed with the Registrar of Companies (RoC). 

The report, however, clarified that changes in agreement do not amount to any kind of defaulting on BYJU’S part. Infact, the company’s CEO Byju Raveendran is directly involved in the talks.  BYJU’S has also onboarded several individual advisors as well as law firms close to the agreement, the sources told ET. 

“BYJU'S is working towards amendments for its $1.2-billion term loan. Interest rate is one of the key factors being changed. BYJU'S is aiming to finalise it with about a 200-250 bps increase. The talks are in the final stages but are yet to be signed,” said one of the persons cited above. 

BYJU’S parent, Think & Learn Pvt. Ltd, released its results after an 18-months delay. It saw its consolidated losses widen by nearly 20 times to Rs 4,588.75 crore in FY21 from Rs 231.69 crore in FY20. Revenues from operations grew marginally to Rs 2,280.26 crore in FY21 from Rs 2,189 crore in FY20. 

BYJU’S co-founder Divya Gokulnath told BT in an interview earlier that they are on the road to “becoming profitable.” She also revealed that they are planning a public listing in India for Aakash Educational Services, which was acquired by the edtech major in 2021 for $1 billion. 

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