Lenders Term Byju's Lawsuit 'Meritless' In a statement, the lenders also said that it is a move to avoid complying with regulations
By Teena Jose
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As a response to the recent lawsuit filed by the edtech unicorn Byju's in the Supreme Court of the State of New York County of New York, ad hoc term loan lenders, collectively own more than 85% of Byju'S $1.2 billion term loan, has issued a statement to termed that lawsuit 'meritless' and said it's a move to avoid complying with regulations.
"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, composed 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," the statement noted.
It also added that, in the event Byju's intentionally remains in default, the lender group reserves all rights available to it to enforce the credit agreement.
Earlier reports revealed that the edtech major had sued lenders led by Redwood in the New York Supreme Court to challenge the acceleration of the $1.2 billion Term Loan B (TLB). It was due to make a quarterly interest payment of about $40 million to meet the June 5 deadline on the said $1.2 billion loan. BYJU's had asked for the disqualification of Redwood, who it accused of purchasing a significant portion of the loan while primarily trading in distressed debt, contrary to the terms of TLB.
The lenders in March unlawfully accelerated the loan due to certain alleged non-monetary and technical defaults, Byju's said in a statement, adding that the lenders undertook unwarranted enforcement measures, including seizing control of its US unit -- Byju's Alpha, and appointing its management.
