New Delhi: A group of ad hoc term loan lenders who collectively own more than 85 per cent of the ed-tech BYJU’s $ 1.2 billion term loan, on June 09 said that the lawsuit filed by the troubled ed-tech startup is ‘meritless’.

What is the whole chaos?

On june 5 BYJU’s needed to make a $40 million quarterly interest payment on its $ 1.2 billion term loan B (TLB) which, it skipped. Instead of making the fair payments the Indian educational technology company filed a lawsuit in the Supreme Court of New York, making allegations on lender Redwood of buying a significant portion of the loan along with trading in distressed debt with the intent of making unexpected gains.

As per BYJU’s “a series of predatory tactics” is being done by the lender which, Redwood is leading.

The ed-tech firm whose luck is facing difficult challenges lately, however, said that it is inclined to continue payments under the TLB only on the condition, that the lenders take back their ill-conceived actions and honour the terms of the agreement.

Lender’s statements

“BYJU’S’ meritless lawsuit against its term loan lenders is simply an effort to avoid complying with its obligations, including making contractually required payments. The lender group, comprised of 21 highly respected global institutional investors, has sought to work constructively with the company over the past nine months to cure its numerous defaults and will continue to do so in good faith. However, in the event, BYJU’s intentionally remains in default, the lender group reserves all rights available to it to enforce the credit agreement,” the lenders said in their court filing.

The lenders adding further said how Byju’s not only failed to produce audited financial statements for the fiscal year 2022 but was also unable to provide complete, unaudited financial statements for various fiscal quarters.

What BYJU’s have to say?

Bjyu’s who on various intervals have been trying to strike an agreement with its lenders to restructure the loan said it decided not to pay with interest until the matter is settled in the court.

The previous month, Bjyu’s said that there has been no default in the repayment of loans by the company. And claimed that 500 million worth of loans were transferred from the group’s US entities to finance growth plans.