Home Technology Byjus: Byju’s has sued its American lender Redwood in the US court, read the company’s statement – Times of India

Byjus: Byju’s has sued its American lender Redwood in the US court, read the company’s statement – Times of India

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Byjus: Byju’s has sued its American lender Redwood in the US court, read the company’s statement – Times of India

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Edtech major Byju’s has reportedly sued its lender Redwood, an American investment management company and its related entities in the New York Supreme Court for accelerating the repayment of a $1.2 billion Term Loan B (TLB). According to a report in Economic Times, this marks a new twist in the long-drawn saga playing out between Byju’s and its lenders. This comes after Byju’s missed its quarterly interest payment of about $40 million for the TLB that was due on June 5. Byju’s offshore lenders were scheduled to receive their interest payments on May 25, as per the contract, with grace period until June 5.
Byju’s had arranged the $1.2-billion term loan in November 2021. This was before the edtech sector slipped into turmoil globally and in India. It was then called one of the biggest such financing by an Indian startup. Byju’s had planned to use the loan to finance some of its potential global acquisitions.
Byju’s terms loan demands as “high-handed”
Byju’s on its part has termed the lenders’ demands as “high-handed” for the TLB loan, which is at the centre of the company’s financial troubles. In its suit, the Bengaluru-headquartered company has sought to “disqualify” lender Redwood, which has allegedly resorted to “predatory tactics”, and consistently increased its exposure by acquiring a sizeable stake in the TLB with “the intent of making windfall gains”, the company said in a statement. “It is important to note that BYJU’S had so far demonstrated remarkable restraint by refraining from utilising the disqualification clause, instead striving for months to achieve an amicable resolution with the hawkish trader-lenders,” the edtech said.
Byju’s has also said to have “elected” to not make any further payments to the TLB lenders till the matter is in court. “Given that legal proceedings are now on in both Delaware and New York, it is clear that the entire TLB is disputed,” the company said. “As such, Byju’s cannot be expected to and has elected not to make any further payment to the TLB lenders, including any interest, until the dispute is decided by the court,” said the company. “BYJU’S has had to take these measures following a series of predatory tactics by the lenders, led by Redwood,” it further added.
It further added that “it remains open to discussions with the TLB lenders and is ready, willing and able to continue making payments under the TLB if the lenders withdraw their ill-conceived actions and honour the terms of the agreement”.
Byju’s has gone to court after several weeks of continued negotiations with the lenders to finalise the new terms for the now-disputed loan agreement reportedly failed.



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