New Delhi: Education startup Byju’s has elected not to make further payments on a $1.2 billion loan after a dispute with lenders, escalating a conflict that could jeopardize the future of India’s highest-flying startups. Earlier on Monday it did not pay $40 million in interest that was due on that loan.
In a statement issued by the company today, it said that it has filed a complaint concerning the loan in the New York Supreme Court. “Given those legal proceedings are now on foot in both Delaware and New York, it is clear that the entire TLB is disputed”, commented the company’s spokesperson.
Byju’s had been trying hard to strike a deal with its creditors to restructure the loan after the pandemic era online tutoring boom tapered off and crimped its finances. In its suit, Byju’s sought to disqualify lender Redwood, which allegedly has taken on predatory tactics and consistently increased its exposure by acquiring a sizable stake in TLB with the intent of making windfall gains.
Byju’s is a company led by former teacher Byju Raveendran had previously missed the deadlines to file financial accounts and its offices were searched by India’s nodal agency to investigate violations of nation’s foreign exchange policies. Raveendran had founded the education startup in 2015 and soon it grew into the most valuable startup of India through a surge in demand for online education. It reached a valuation of $22 billion and had considered merging with a special-purpose acquisition company or SPAC.