Byju's Says Residual Loan Money Invested In High-Grade Fixed Income Assets

Edtech giant Byju's has said its offshore subsidiary remains the beneficiary of the term loan B money after Bloomberg reported that about $533 million is parked with a little-known investment firm.

"An offshore subsidiary remains the beneficiary of the money invested in high-security fixed income instruments invested with a multi-hundred billion dollar fund in the U.S.," it said in a statement on Wednesday.

The terms of the $1.2-billion loan, as agreed upon with the lenders, allow it to use, move, or invest the funds. As a result, it transferred more than half a billion dollars to Camshaft Capital Fund—a hedge fund that once listed its principal business address in a building that now houses a branch of the American pancake diner, IHOP.

"Accordingly, as a commercially prudent borrower and like any other large corporate treasury, in compliance with the credit agreement, Byju's has safeguarded the referenced funds with the global fund," the company said.

Byju's added that it is continuing to engage in negotiations with the creditors to settle the dispute. It said these "instigations" seek to "destabilise a company that is attempting a turnaround."

The Bengaluru-based edtech and its lenders have been mired in conflict for almost a year, during which several rounds of negotiations to restructure its loan agreement have failed.

The company has now moved a proposal with the creditors to buy back the loan within six months. To repay the entire amount, it has started talks to offload its acquisitions—Epic! and Great Learning Inc.—to raise about $1 billion.

The queries sent by BQ Prime to the lenders’ representative didn't receive a response at the time of publishing.

Byju's took the five-year loan, one of the largest by a startup ever, in 2021 to bolster its growth outside India.