Troubled edtech major Byju’s will close the sale of its US-based children’s digital reading platform Epic in the next 10 days for $400 million, according to sources. The edtech major is considering this sale to alleviate its financial challenges.
The company is in advanced talks with US-based private equity fund Joffre Capital for the sale, according to news reports. Other bidders, including Duolingo Inc, have also expressed interest in buying the firm, the reports added.
The potential sale of Epic could provide Byju’s with the funds to pay the $1.2-billion term loan. In September this year, after months of negotiations with lenders, Byju’s proposed to repay the entire $1.2 billion loan within six months, with an initial payment of $300 million within three months.
Recently, the edtech firm has put two of its assets Epic and Great Learning on the chopping block to generate about $750 million-$800 million, as the company looks to repay the $1.2 billion Term Loan B, reported buisnessline. Byju’s acquired Epic, the US-based kids learning company in 2021 for $500 million.
“It is coming at a time when the company is in financial doldrums. This is a distress sale, and the buyer will also try and squeeze the best deal possible at this point of time if at all the deal takes place,” said Shriram Subramanian, Founder of InGovern, a corporate governance advisory firm.
The firm is also in talks with Ranjan Pai to raise funds for repaying the debt along with interest to Davidson Kempner, a US-based investment firm that committed about $250 million in structured instruments linked to future cash flows from Byju’s largest asset, Aakash Educational Services.
Meanwhile, after multiple delays in releasing its financial statements for the financial year 2021-22, Byju’s recently released some numbers for its core operations.
The edtech decacorn revenue, excluding all acquisitions, rose to ₹3,569 crore, above ₹1,552 crore reported in the preceding year. While it reported an EBITDA loss of ₹2,253 crore in FY22, compared to ₹2,406 crore loss it reported in FY21.