Byju's lenders say lawsuit is meritless, designed to dodge obligations

Lenders say will continue to work in good faith with firm to cure its numerous defaults, but reserves rights to enforce credit agreement if Byju's intentionally remains in default


Photo: Bloomberg

Shivani Shinde Mumbai

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A group of ad hoc lenders, who collectively own more than 85 per cent of Byju's term loans amounting to $1.2 billion, said in a statement that the recent lawsuit filed by the edtech firm in the Supreme Court of the State of New York County in New York State lacks merit.

“Byju's meritless lawsuit against its term loan lenders is simply an effort to avoid complying with its obligations, including making contractually required payments,” said the statement.

The statement further states, “The lender group, comprised of highly respected 21 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.”

Also Read: Byju's accuses lenders of manufacturing fake debt crisis to extort money

Houlihan Lokey serves as financial advisor to the term loan lender group and Kirkland & Ellis LLP, Cahill Gordon & Reindel LLP, and Shearman & Sterling LLP are serving as legal advisors.

Byju’s filed a case on June 5 against Redwood seeking its disqualification. On March 3, the TLB lenders unlawfully accelerated the TLB on account of certain alleged non-monetary and technical defaults, claimed Byju’s. On the back of this unconscionable acceleration of the TLB, the TLB lenders undertook unwarranted enforcement steps, including seizing control of Byju’s Alpha and appointing its own management.

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First Published: Jun 9 2023 | 1:35 PM IST

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