Byju’s lenders appoint Kroll to safeguard assets of Great Learning, Singapore entity

NEW DELHI: Lenders of Byju’s have appointed risk advisory firm Kroll to safeguard the charged assets of Great Learning and the troubled edtech firm’s Singapore entity Byju’s Pte. Ltd (BPL). The move comes at a time when Byju’s is looking to sell its subsidiaries Great Learning and Epic to raise money and repay the $1.2 billion term loan B it raised from lenders in 2021. The startup is hoping to raise $800 million-$1 billion from the sale of the two assets. Charged assets are assets that are used as collateral to get a loan, enabling the lender to seize them in case the borrower defaults.

“The appointment was made on behalf of secured creditors of Byju’s Alpha Inc, as part of the secured lenders’ exercise of their security rights following defaults by Byju’s Alpha Inc,” Kroll said in a statement on Wednesday. “A primary focus of the appointment is to protect and preserve the assets and businesses owned by Great Learning (including its subsidiary Northwest Education Pte. Ltd.) and BPL,” the advisory firm said adding that the operations of Great Learning and Northwest Education will not be impacted by the appointment and all courses offered by them will continue. Queries sent to Kroll did not elicit any response.

Such a step is normally taken when lenders want to protect their investment by ensuring that the charged assets of the company are not disposed of or if at all if they are disposed of, then they are done so at the right value and the considerations are adjusted as per the terms of the agreement. Its a protectionist step, said Sameer Jain, Managing Partner, PSL Advocates & Solicitor

In a statement, Byju’s said that it is working with TLB lenders and the management of Great Learning for a “potential divestment at optimal value.” “This will allow Great Learning’s future growth as an independent company,” a company spokesperson said. It is understood that the founders of Great Learning are attempting to buy back the company from Byju’s. Following the Covid-led edtech boom, Byju’shad spent billions on acquisitions and had acquired upskilling platform Great Learning in a $600 million deal in 2021.

Byju’s and its term loan lenders have engaged in disputes in the recent past. In June, the startup had skipped making a $40 million quarterly interest payment on the $1.2 billion loan and instead sued the lenders in a US court, challenging acceleration of the term loan.

Kroll has appointed global co-head of restructuring Cosimo Borrelli and Singapore and South East Asia lead Jason Aleksander Kardachi to safeguard the assets of Great Learning and Byju’sPte. “I am happy to see the Kroll team’s commitment towards Great Learning’s high quality education and continued growth and look forward to collaborating with them towards the realisation of our mission of enabling career success through transformative learning,” Mohan Lakhamraju, founder and CEO at Great Learning said.