The lenders of Byju's have said the lawsuit against them by the edtech firm was an effort to avoid complying with its obligations and a bid to avoid making contractually required payments.
The suit against them is "meritless", according to a statement on Thursday by the lenders, who collectively own more than 85% of Byju's $1.2-billion term loan.
Byju's had filed a complaint in the New York Supreme Court to challenge the acceleration of the $1.2-billion term loan and to disqualify Redwood, an agent of the lenders, which has allegedly indulged in a series of "predatory tactics".
The Bengaluru-headquartered firm claimed that the lenders unlawfully accelerated the loan due to certain alleged non-monetary and technical defaults.
The company said it would not be making any further payments on the term loan as legal proceedings were ongoing in both Delaware and New York. "Byju's cannot be expected to and has elected not to make any further payment to the lenders, including any interest, until the dispute is decided by the court."
Byju's said it was willing to continue making payments under the term loan if the lenders withdraw their "ill-conceived actions" and honour the terms of the agreement.
The lender group, comprising 21 global institutional investors, said they sought to work constructively with the company over the past nine months to "cure its numerous defaults". However, it warned that if Byju intentionally remains in default, the lender group reserves the right to enforce the credit agreement.
Houlihan Lokey serves as a financial adviser to the term loan lenders group, and Kirkland and Ellis LLP, Cahill Gordon and Reindel LLP, and Shearman and Sterling LLP are serving as legal advisers, according to the statement.
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