Byju's goes to New York Supreme Court, says 'It will not make further loan repayments to lenders'

Indian edtech giant Byju's, which recently faced a massive valuation cut by BlackRock, has filed a case against investment management firm Redwood in the New York Supreme Court to challenge the acceleration of a $1.2 billion term loan B facility and disqualify the lender for its "predatory tactics."

The edtech giant has also accused the investment firm Redwood of leading a group of lenders to play predatory tactics against it. 

Byju's, in a statement, said Redwood purchased a significant portion of the loan while primarily trading in distressed debt, which goes against the conditions of the term loan facility.

It has also issued a notice to Redwood entities disqualifying the investment firm as a lender with critical rights under the term loan norms once it takes effect.

"On 3 March 2023, the TLB lenders unlawfully accelerated the TLB on account of certain alleged non-monetary and technical defaults. On the back of this unconscionable acceleration of the TLB, the TLB lenders undertook unwarranted enforcement measures, including seizing control of BYJU'S Alpha and appointing its own management. Not resting content with this, the TLB lenders (acting through their agent, GLAS Trust Company) commenced litigation in Delaware in an attempt to lend credence to these actions," Byju's said.

The development comes after Byju's skipped the $40 million loan repayment deadline on Monday. The company also said it won't make any further payments to the term B loan providers, including any interest until the case is resolved.

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