Byju's Confirms Investment of Remaining TLB Funds in High-Grade Fixed-Income Assets.

Byju's, embroiled in a year-long dispute with its term loan B (TLB) lenders, has been engaged in intense negotiations to reach a resolution. The edtech giant responded to allegations of concealing TLB funds by stating that it had invested the remaining TLB funds in "high-grade fixed income assets" and refuted claims of placing the money in an "obscure hedge fund."

In a statement released on September 13, Byju's emphasized that its Credit Agreement with lenders did not impose any restrictions on the use, movement, or investment of disbursed funds. The company clarified that an offshore subsidiary was the beneficiary of the funds invested in highly secure fixed income instruments managed by a multi-hundred billion dollar fund in the United States. Byju's also denied media reports suggesting that it was no longer the owner of the funds.

Earlier in the day, Bloomberg and The Wall Street Journal reported that Byju's had allegedly hidden $533 million in a three-year-old hedge fund called Camshaft Capital Fund, which was rumored to operate primarily from an IHOP pancake restaurant in Miami. These reports were based on a lawsuit filed by lenders in Miami.

The creditors argued in Miami-Dade County court filings that Byju's had gone to great lengths to conceal the whereabouts of the $533 million to hinder and delay creditors. In response, Byju's stated that it had safeguarded the $533 million with a global fund in compliance with its credit agreement, without disclosing the fund's name. Byju's also pointed out that the Delaware court ruling in June rejected the lenders' request for information regarding the funds held by Byju's Alpha, the borrowing entity under the TLB.

Byju's, which has been in a dispute with its TLB lenders for nearly a year, has recently proposed a plan to repay the entire $1.2 billion loan within six months, including an upfront payment of $300 million within three months. This loan was raised in November 2021 from overseas investors to refinance existing debt and support overseas acquisitions.

Additionally, Byju's is conducting a strategic review of its assets and has put two key subsidiaries, Great Learning and Epic, up for sale to generate approximately $1 billion for loan repayment. The company is also seeking to secure fresh equity investment from Middle East-based sovereign wealth funds, a process that has been ongoing since the beginning of the year but has not yet concluded.

In its statement, Byju's expressed its commitment to reaching an amicable resolution to the dispute, characterizing recent media coverage as malicious attempts to destabilize the company during its turnaround efforts.