Edtech major BYJU'S on Friday said it has not defaulted on repayment of loans raised from American lenders and USD 500 million worth of loans were transferred from the group's US entities to fund growth plans.
The statement comes against the backdrop of lender Glas Trust company and investor Timothy R Pohl filing a lawsuit against BYJU's US-based entities for certain alleged wrongful acts.
They have sued BYJU'S Alpha and Tangible Play for moving USD 500 million out of BYJU'S Alpha.
The two entities are part of Think and Learn Private, the parent of BYJU's.
In a statement on Friday, BYJU's said that BYJU's Alpha is a non-operative US entity set up to receive the Term Loan B, which were provided to the company by institutional investors.
However, specific details about the Term Loan B were not disclosed by the edtech major.
"The litigants have made bewildering claims that BYJU'S 'moved' USD 500 million from BYJU'S Alpha, insinuating that these acts were somehow wrongful. This is entirely incorrect. We categorically deny these allegations.
"The transfers were in full compliance of and did not contravene any terms of the parties’ Credit Agreement and the agreed-upon rights and responsibilities," BYJU's said.
According to the statement, BYJU'S Alpha is a non-operative entity and the funds were transferred to other operative entities for growth and expansion of its global operations.
Term Loan B was raised with the clear intention of utilising the raised funds to drive growth and expansion in its global operations and is free to transfer and use the funds as necessary.
"Additionally, BYJU’S has fulfilled all its contractual payment obligations as agreed upon in the Term Loan B signed in 2021 and has not missed a single payment thereunder. There have been no monetary defaults under the loan. The lenders' allegations (which also we dispute) concern merely insignificant technical and non-monetary defaults," BYJU'S said.
Further, the company said that a Delaware court in the US has passed an interim order to maintain the status quo in relation to BYJU’S Alpha. However, specific details about the interim order were not disclosed.
"The order does not have any bearing on any other subsidiary of BYJU’S anywhere in the world. Further, this is a temporary order and the court has not made any final determination against Byju's Alpha, including in relation to the transfer," the statement said.
Recently, the company closed a USD 250 million fund raise from Davidson Kempner Capital at a flat valuation of USD 22 billion and is in the process to raise another USD 750 million from a sovereign fund.
"The successful completion of a recent funding round of USD 250 million further reinforces our financial stability and serves as a testament to the unwavering confidence that investors have in our business.
"We will continue to assertively negotiate with our lenders to secure a resolution that not only ensures the long-term sustainability of our international operations but also aligns with our unwavering mission of providing quality education globally," the statement said.
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