Lenders Dismiss BYJU'S Lawsuit as Meritless

A collective of lenders labelled the recent lawsuit filed by BYJUS in the New York Supreme Court as "meritless" and an attempt to evade its financial obligations. These lenders, holding over 85% of BYJU'S $1.2 billion term loan, released a statement asserting that the lawsuit is merely a ploy by BYJU'S to avoid fulfilling its contractual payments.

Comprised of 21 highly respected global institutional investors, the lender group has been working constructively with the company for the past nine months to address its numerous defaults. They affirm their commitment to continue these efforts in good faith. However, if BYJU'S intentionally remains in default, the lender group retains all rights to enforce the credit agreement.

Houlihan Lokey acts as the financial advisor to the lender group, with legal advisory services provided by Kirkland & Ellis LLP, Cahill Gordon & Reindel LLP, and Shearman & Sterling LLP. BYJU'S, an edtech unicorn, has been engaged in conflicts with its creditors regarding the loan.

Recently, The edtech giant filed a lawsuit in New York Supreme Court to challenge the loan acceleration and requested the disqualification of one of the lenders, Redwood.

BYJU'S was expected to make a quarterly interest payment of approximately $40 million on the loan by the June 5 deadline. However, in a subsequent statement, BYJU'S declared that it would not make any further payments, including interest, to the lenders until the court resolves the ongoing dispute.

Nevertheless, the company expressed its willingness to engage in discussions with the lenders and continue making payments if the lenders withdraw their legal actions and honor the agreement's terms.

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