Byju's Races Against Time to Meet $40 Million Payment Deadline

In a race against the clock, Byju's, India's most valuable startup, is reportedly planning to make a substantial quarterly interest payment of approximately $40 million. The payment is linked to a loan that has become the epicentre of the company's financial woes.

Byju's faces a crucial deadline today as it strives to fulfil its obligation by making the $40 million installment. Failure to meet this payment will result in the loan defaulting, which has been the primary cause of the firm's ongoing financial struggles.

The $40 million payment, shrouded in secrecy and undisclosed to the public, is expected to be made imminently. However, the fluidity of the situation leaves room for the possibility of changes to Byju's payment plan.

As India's renowned edtech player, Byju's is sparing no effort to meet its financial responsibilities. The company aims to submit the quarterly interest payment of $40 million by today, effectively meeting the June 5 deadline.

The stakes are high, as Byju's failure to pay the interest would trigger a default on the colossal $1.2 billion loan, making it the largest unrated loan ever extended to a startup.

Adding to Byju's challenges, the company has encountered delays in filing its financial accounts for the fiscal year ending on March 31.

In a separate setback, the Enforcement Directorate (ED) recently conducted searches at Byju's premises, investigating potential foreign exchange violations under the Foreign Exchange Management Act (FEMA). Byju's CEO, Raveendran Byju, and the company's locations were targeted during the raids. Previous summonses to Raveendran Byju went unanswered as he evaded the investigation.

Byju's downplays the ED's actions, characterizing them as routine inquiries under FEMA, and maintains that its business operations continue as usual. The company assures its willingness to cooperate closely with the authorities, providing the required information.

As the clock ticks towards the deadline, the outcome of Byju's race against time carries significant implications for the future of the edtech giant.

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