Never lent any money to edtech BYJU’S: Financial services giant IIFL Finance
Despite BYJU’s stating as much in its financials for the fiscal year 2020–2021 (FY21), financial services giant IIFL Finance has asserted that it has never lent any money to the largest edtech company. In a clarification, IIFL referred to the mention as a mistake on BYJU’S end.
“It has come to our notice that Think & Learn Private Limited (“BYJU’S”) has erroneously stated IIFL Finance Limited as Lender in their Audited Standalone and Consolidated Financial Statements for the period ended March 31, 2021,” said IIFL Finance in a filing with the BSE.
In its audited financial statements for FY21, the edtech giant reportedly listed IIFL Finance as a lender to the tune of INR 440.77 Cr. In a letter to the lending company dated August 23, 2023, BYJU’S has acknowledged that the inclusion of IIFL was “inadvertent.”
“We further confirm that IIFL Finance Limited has not lent any money to BYJU’S, and this was an error in their audited financial statements,” the company added.
The edtech behemoth is battling two different groups of lenders for settlements on a total lending amount of $1.45 Bn- the Term Loan B (TLB) lenders and Davidson Kempner.
BYJU’S can now breathe a sigh of relief after the company’s TLB lenders decided to postpone their ongoing legal dispute in US courts until October 6. Both parties will probably have more time to negotiate an out-of-court settlement thanks to this postponement.
To prevent the TLB lenders from hastening the closure of its $1.2 Bn loan, BYJU’S had filed a lawsuit in the New York Supreme Court. The lenders claimed BYJU’S had broken numerous covenants, including submitting financial statements for FY22 that had been delayed for several quarters. Therefore, the lenders requested quick loan repayment.
Both parties have been negotiating new repayment terms and a loan restructuring for the past few months. These negotiations include upfront payments of $200 million and 12-13% interest with a restructured tenure of 3-5 years.
Along with this, the edtech behemoth is in conflict with another one of its lenders, Davidson Kempner. Aakash Educational Services Limited (AESL), the offline test prep division of the edtech giant, has violated a loan covenant, and BYJU’s and DK are in talks to resolve the issue.
Even though BYJU’S has offered to pay back the entire loan amount plus interest, the lender wants to charge interest for one to two years. Instead, co-founder and CEO of BYJU Byju Raveendran has suggested interest for one quarter.
A formal proposal from the two parties is anticipated this week. The topic of discussion between the two businesses is the precise payout.
On the sidelines, it is rumored that Manipal Group Chairman Ranjan Pai has finalized a $80 million investment in Aakash that could be used to pay Davidson Kempner back in exchange for shares of Aakash.
