Even though the current circumstances are challenging, things will improve soon, Byju Raveendran, co-founder and CEO of Byju’s, assured the company’s employees at a townhall meeting held on Thursday.

“We are in a tough phase, but we will come back soon,” sources quoted Raveendran as saying during his 45-minute long meeting. In a communication to employees, Raveendran also reportedly emphasised the enduring significance of the edtech sector, stating: “For the last 12 months, we have been struggling. But edtech will stay forever, and we are the pioneers. It is one of the most important sectors and we are in the correct space.”

Term loan issue

The company has been in troubled waters regarding the $1.2-billion Term Loan B it took from the lenders. While it failed to make the quarterly interest payment of about $40 million, the start-up, however, chose to sue the lenders, led by Redwood, in the New York Supreme Court to challenge the acceleration of the TLB.

Meanwhile, it had also sought to initiate one-on-one meeting with the lenders to resolve the issue. However, the latter rejected the proposal but remained open to joint negotiations with the company to settle lawsuits and other concerns. Bloomberg has reported that this agreement among lenders, which was due to expire in July, has been extended for at least three more months.

While its trouble with lenders continues, the start-up’s auditors Deloitte Haskins & Sells also resigned earlier this month. The company has now appointed BDO (MSKA & Associates) as its statutory auditors for the year commencing from FY22 for the next five years.

Three board members — GV Ravishankar of Peak XV Partners (formerly Sequoia Capital), Vivian Wu of Chan Zuckerberg Initiative and Russell Dreisenstock of Prosus — also tendered their resignations reportedly due to differences with founder. However, in townhall address, Raveendran has reportedly clarified that these resignations were unrelated to Deloitte’s departure.

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