Last month, in a structured credit transaction against the cash flows of Think and Learn’s subsidiary, test prep firm Aakash Educational Services, the parent entity of Byju’s raised Rs 2,000 crore as a three-year loan facility. This transaction was contingent on the edtech resolving its differences with bond holders and was linked to a potential equity upside from a future initial public offering (IPO) of Aakash.
“However, as the talks with lenders have not progressed as expected, Davidson Kempner has withheld the transfer of the full amount,” a person directly aware of the development told ET.
As things stand, Byju’s and lenders are back on the negotiating table and have mutually agreed to find a solution by August, the person added.
Byju’s was planning to upstream the cash raised to the holding company to meet its financing needs, ET reported on May 13.
Due to the ongoing issues that Byju’s is battling with its $1.2 billion term loan B (TLB) lenders and the delay in filing its financial statements for year ending March 31, 2022, the transaction with Davidson Kempner is yet to result in the Rs 2,000 crore coming into the beleaguered company, said another person in the know.
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“Davidson Kempner has imposed a condition precedent (CP) on the loan which is resting on the filing of its financial accounts,” said another person familiar with the matter.Byju’s was hit by a double whammy last week when its auditor Deloitte Haskins & Sells and three key board members from Peak XV Partners, Prosus and Chan Zuckerberg Initiative resigned from the company’s board.
A person close to the edtech firm, however, said Davidson, which manages more than $38 billion of assets, had transferred Rs 800 crore in two tranches to Byju’s. “There are certain terms and conditions upon which the full amount will come into the company. Byju’s is working towards that,” this person added.
Emailed queries to Byju’s and Davidson Kempner did not elicit any response till the time of publishing.
