Online education company was once India’s most valuable start-up but now plans asset sales to settle debts...


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https://www.ft.com/content/850a98a4-1361-4391-ace2-3edb58cb86cd

An educational technology empire rapidly assembled by Byju’s during a pandemic funding boom is now set to be dismantled, as what was once India’s most valuable start-up looks to asset disposals to settle its pressing debts.  

Byju’s had used loans and a war chest of more than $2bn, gathered from venture capital during the pandemic, to go on an acquisition spree, aiming to capitalise on the trend towards online learning and become a global edtech powerhouse.

But overexpansion and a post-pandemic contraction in its market have left it desperate for cash to pay off creditors. The principal ones hold notes for a $1.2bn dollar-denominated term loan it took out in 2021 and has defaulted on, embroiling it in lawsuits and countersuits across the US. 

In addition, it has borrowed $250mn this year from investment firm Davidson Kempner Capital Management, although two people with knowledge of the situation said under $100mn was disbursed before Byju’s defaulted on that loan too. 

A lawyer familiar with the situation said he expected “Byju’s to drive a lot of M&A in the coming months”. Its efforts to realise cash through disposals are set to begin with Epic, a California-based digital reading platform, which it acquired in 2021 for $500mn. One person familiar with the matter said term sheets had been drawn up for a deal and another said Moelis, the investment bank, was running the sales process. Moelis declined to comment.

Nirgunan Tiruchelvam, head of consumer and internet at Singapore-based Aletheia Capital, said “a battle for the spoils” was beginning, as “various parts of the business could be sold to people who are interested in buying an asset at a discount to its fair value”.


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https://www.ft.com/content/850a98a4-1361-4391-ace2-3edb58cb86cd

An educational technology empire rapidly assembled by Byju’s during a pandemic funding boom is now set to be dismantled, as what was once India’s most valuable start-up looks to asset disposals to settle its pressing debts.  

Byju’s had used loans and a war chest of more than $2bn, gathered from venture capital during the pandemic, to go on an acquisition spree, aiming to capitalise on the trend towards online learning and become a global edtech powerhouse.

But overexpansion and a post-pandemic contraction in its market have left it desperate for cash to pay off creditors. The principal ones hold notes for a $1.2bn dollar-denominated term loan it took out in 2021 and has defaulted on, embroiling it in lawsuits and countersuits across the US. 

In addition, it has borrowed $250mn this year from investment firm Davidson Kempner Capital Management, although two people with knowledge of the situation said under $100mn was disbursed before Byju’s defaulted on that loan too. 

A lawyer familiar with the situation said he expected “Byju’s to drive a lot of M&A in the coming months”. Its efforts to realise cash through disposals are set to begin with Epic, a California-based digital reading platform, which it acquired in 2021 for $500mn. One person familiar with the matter said term sheets had been drawn up for a deal and another said Moelis, the investment bank, was running the sales process. Moelis declined to comment.

Nirgunan Tiruchelvam, head of consumer and internet at Singapore-based Aletheia Capital, said “a battle for the spoils” was beginning, as “various parts of the business could be sold to people who are interested in buying an asset at a discount to its fair value”.