Editors’ Note: The following story was originally published on July 1 and has been republished during regular business hours to reach a wider audience.
The debenture trustee for INR 20 billion ($243.9 million) non-convertible debentures (NCDs) of Byju's subsidiary Aakash Education Services Ltd., has sent an event of default notice to the issuer on behalf of Davidson Kempner Capital Management, an investor in the NCDs, said two sources close to the matter.
The EoD was sent earlier this week because of the parent company's significant financial liabilities and alleged cross defaults, the sources added.
Aakash Education Services issued the unrated, unlisted redeemable NCDs on May 11, according to
data from National Securities Depository Ltd. The NCDs are guaranteed by parent company, Think & Learn Pvt. Ltd., the
data shows.
The EoD notice alleges that Davidson Kempner was not made aware that the lenders to Think & Learn’s $1.2 billion term loan B, or TLB, had accelerated the facility in March, well before the issue of the NCDs in May, the sources said.
A reported
payment default on a $40 million interest instalment on the loan in June has also likely triggered cross-default covenants, the sources added.
Byju’s
announced on June 6 that it had filed a complaint in the New York Supreme Court to challenge the acceleration of the TLB.
TLB lenders accelerated the loan on March 3 on account of alleged non-monetary and technical defaults and subsequently took enforcement measures, including seizing control of Byju’s Alpha and appointing its own management, as reported.
Davidson Kempner declined to comment. Byju’s could not be reached for immediate comment.
– Dipika Lalwani, Malvika Joshi