Byju's EdTech Bounces Back: $1.2 Billion Loan Case and Rs 3 Crore Monthly Cost-Cutting Move Bring Relief

The leading EdTech giant led by founder Byju Raveendran is poised for a turnaround with two significant developments on the horizon. Byju's has reportedly reached a resolution with US lenders embroiled in a legal tussle over a $1.2 billion loan case. Additionally, the company has undertaken bold cost-cutting measures to ease strained finances.

The long-standing loan row, which had been a major challenge for Raveendran and his leadership team, seems to have reached a positive outcome. Lenders holding a combined stake of 85% in the Term B loan have agreed to rework the payment plan with Byju's. An Economic Times report suggests that the amended loan deal is expected to be signed by August 3.

Simultaneously, Byju's has taken proactive steps to reduce costs amid financial pressures. The company has recently vacated several office spaces, including its largest office in Bengaluru. With over 3 million square feet of leased space across India, Byju's will save nearly Rs 3 crore in rent per month by relinquishing 5.58 lakh square feet of leased space, according to a MoneyControl report.

These developments come on the heels of protests by a section of Byju's Tuition Centres (BTC) workforce, who raised concerns over non-payment of incentives. The financial challenges have also hindered the company's efforts to secure a fresh infusion of $700 million in funds, which has yet to be finalized.

Once hailed as the poster boy of the Indian startup ecosystem, Raveendran has been grappling with various issues, including questions surrounding corporate governance, delayed financial reporting, and the resignation of auditors, all amid well-known cash flow problems. Despite having raised around $5 billion to date and achieving a valuation of $22 billion last year, making it India's most valuable startup, Byju's valuation has been slashed to $8.4 billion by asset firm Blackrock due to the ongoing crisis.

With the resolution of the loan case and the implementation of cost-cutting measures, Byju's aims to regain its strong footing in the EdTech market and restore confidence among investors and employees alike.

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