Byju’s has put two of its key assets — Epic and Great Learning — on the block, hoping to generate $800 million to $1 billion in cash, to help meet its commitment to clear a $1.2-billion term loan B. The troubled edtech has been working with bankers to sell the two assets to strategic investors.
Simultaneously, the company is in talks to raise fresh equity capital. Byju’s is expecting between $400-500 million from the sale of Epic, a US-based kids’ learning company it had acquired in what was a $350-400 million cash-and-stock deal in July 2021. From the sale of higher education and upskilling firm Great Learning, Byju’s expects around $500-600 million. Byju’s has proposed to repay its entire $1.2-billion term loan B (TLB) to its lenders in less than six months.
Byju’s is simultaneously engaging with sovereign funds for a new fundraise.
Bloomberg first reported about Byju’s proposal to clear the $1.2 billion TLB. If the sales go through, Byju’s will get some much-needed ammunition to manage its financials, and some elbow room in negotiations with promoters of test preparation company Aakash Institute as well as creditor Davidson Kempner.
Byju’s has been in talks with its TLB creditors for months now after the latter demanded immediate repayment of the loan Both parties even sued each other in US courts, which was followed by a joint statement from the lenders and Byju’s in July saying both the parties have agreed to finalise new credit terms for the TLB. While it was expected to be inked by August, a formal statement on the same is yet to be out and Byju’s latest proposals would pave the way for both the parties to resolve the matter.
It was reported on August 9 that Byju Raveendran, CEO of Byju’s, had proposed a higher interest rate to the lenders which would lead to increased payout of $50-60 million in interest. The negotiations on new terms for the loan were triggered by breach of terms by Byju’s including delay in furnishing audited financials for FY22 and FY21.
Both Raveendran and his chief financial officer Ajay Goel promised shareholders on June 24 that audited results for FY22 will be shared by the end of September and the same for FY23 would be in place by December 2023.
If the latest proposals are accepted between lenders and Byju’s, the edtech company has promised to pay $300 million in the next three months while clearing the remaining in subsequent three months. Epic and Great Learning are among a series of acquisitions Byju’s had made in 2021 when edtech received a massive tailwind due to Covid-19. Buyout of Toppr and Aakash were part of the same strategy by Byju’s to expand operations in India and abroad, going beyond K-12.
Source: The Economic Times