Trouble mounts for Byju's as firm's plan to sell assets hits a roadblock

Trouble mounts for Byju’s as firm’s plan to sell assets hits a roadblock

Once the poster child for India’s booming startup economy, Byju’s is struggling to escape a cash crunch. The edtech firm’s plan to sell assets has reportedly hit a roadblock over pricing.

The assets, include Great Learning and Epic. Byju’s is reportedly seeking around $600 million from sale of the higher education asset but is yet to find a buyer with a binding term sheet.

The company is also yet to get a binding offer for Epic. Great Learning, according to an ET report, says is the key to repaying Byju’s $1.2-billion loan.

For Epic, a better asset, a full-cash deal at $400 million is won’t be a cakewalk, the report added. Byju’s is banking on the proceeds from the Epic transaction for daily operations.

Byju’s floated a rights issue on January 29 at a throwaway pre-money price of $25 million — a 99% discount to Byju’s peak valuation — to raise $200 million, which upset investors, including Prosus and Peak XV Partners.

Creditors sued Byju’s this year after it breached covenants on a $1.2 billion loan. The standoff cast a spotlight on founder Byju Raveendran, whose meteoric rise from tutor to head of the country’s most valuable tech startup wowed investors.

At its peak, Byju’s spent heavily to meet surging pandemic-era demand for its services when schools and universities shut their doors. Once a sponsor of India’s national cricket team, it bought several firms in the US and elsewhere and tried to expand globally.

But growth has slowed since classes resumed, and the company’s challenges have been exacerbated by the months-long legal dispute that’s only showing signs of intensifying.

Watch Live TV in English

Watch Live TV in Hindi