Venture Capital: Troubled Indian On-Line Education Startup Byju’s Wants To Restructure $1.2B Loan
The loan is trading at 80 cents on the dollar on Wednesday, after touching a record low of 64.5 cents in September.
Byju’s, the storied Indian educational startup that last scored a valuation of $22 billion, is seeking to renegotiate the terms of its $1.2 billion dollar loan amidst a surge in interest rates and steep losses in its business. (Bloomberg)
Knowledgeable persons, on condition of anonymity, told Bloomberg that the company has appointed an advisor to thrash out more lenient terms on the loan with creditors. These include a lower interest rate and an extension of time to repay the loan.
Servicing the loan may be a problem for Byju’s given its “excessive cash burn,” and these apprehensions are possibly already being factored in by the market. The loan is trading at 80 cents on the dollar on Wednesday after touching a record low of 64.5 cents in September, according to data compiled by Bloomberg.
Though Byju’s has 150 million users, it reported a massive 13-fold jump in losses for the year ended March 2021, the latest period for which financial accounts have been made available.
In October, the company decided to sack 2,500 workers and reduce its sales and marketing costs in an effort to become profitable by March.
Last month, Netherlands-based technology investor Prosus recorded the fair value of its 9.67 percent stake in Byju’s at $578 million at the end of the September quarter, when it began classifying the edtech company as a non-controlling financial investment rather than an associate as its shareholding fell below 10 percent.
The accounting by Prosus implies it values Byju’s at $5.97 billion whereas, the startup was valued at $22 billion in its last funding round in October.
Related Story: Indian Online Learning Startup BYJU’S Raises $500M Amid Red-Hot VC Interest in Edtech
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