Byju's plans asset sale to pay off $1.2 billion loan
By MYBRANDBOOK
India's most-valued startup, Byju’s has decided to put two of its key assets -- Epic and Great Learning -- on the block to generate $800 million-$1 billion in cash. This is to meet with the aim of the edtech firm’s various commitments, including repaying the entire $1.2 billion term loan B (TLB) within six months.
TLB is a term loan by institutional investors with the prime goal of maximising their long-term returns.
If the sale of the assets is successful, it will also help Byju’s manage its financials and solve other issues. This includes negotiations with creditor Davidson Kempner and promoters of its tutoring service subsidiary Aakash Educational Services (AESL), which is in the mid of a shareholder tussle.
The cash-strapped company has proposed repaying $300 million of the $1.2 billion loan in the next three months, depending on whether the lenders accept Byju’s amendment proposal. The lenders have reportedly asked Byju’s for more information with regards to the loan repayment proposal.
“This loan repayment proposal has been submitted to the lenders and conversations are going in the right direction,” said a person aware of the matter.
“As part of that proposal, the plan is to liquidate assets like Epic and Great Learning to generate capital and turn around the business.”
In 2021, Byju’s was on an acquisition spree to grow rapidly in India and globally as the Covid pandemic accelerated the adoption of online education. In July 2021, Byju’s acquired US-based digital reading platform Epic for $500 million. This acquisition was done in a bid to expand its US footprint by getting access to 2 million teachers and 50 million children in Epic’s global user base.
The same month, the edtech firm bought Singapore-headquartered Great Learning, a global player in the professional and higher education segment, in a transaction valued at $600 million, comprising cash, stock, and earnout.
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