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. 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. The parties are working on reaching a forbearance agreement, and “discussions are still ongoing," the court said in its 24 August order. “The parties agree it would further the efficiency interests of this case to allow additional time to facilitate a forbearance agreement." The court also allowed the defendants (lenders) time till 6 October to either respond to the original complaint or move to dismiss it.
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