Edtech giant BYJU’s is in talks to sell its US-based digital reading platform, Epic! Creations Inc., for about $400 million to Joffre Capital Ltd. Moelis & Co. is likely to be handling the sale of Epic! with a possibility of finalising the deal by the end of this month.
In 2021, BYJU’S acquired Epic for $500 million as part of its global expansion plan. According to its website, the US-based edtech provides a library of over 40,000 books on its online platform. Other bidders including Duolingo are interested in buying the deal.
The transaction would relieve BYJU’S financial burden and generate money to settle a contentious $1.2 billion (about Rs. 9,985.7 crore) term loan. Duolingo Inc. is among the several bidders who have expressed interest in purchasing the platform.
Amidst its global expansion during the epidemic, BYJU’S encountered an extension in making interest payments on a term loan. There is a dispute with its creditors as a result of this delay. Financiers were taken aback when BYJU’S suggested selling assets to pay off the $1.2 billion debt in just six months.Due to unpaid interest on its Term Loan B, the Indian edtech company and its creditors are at odds.
After more than a year of delay, the business finally revealed its FY 2021–22 results this past weekend. The business made Rs 3,569 crore in sales. The core business’s EBITDA (earnings before interest, taxes, depreciation, and amortization) loss for the year was Rs 2,406 crore.
Both regulators and investors have been keeping a close eye on BYJU’s. Ajay Goel, the company’s chief financial officer, resigned a week before the results being announced. Deloitte, the company’s auditor, also quit earlier this year, citing a “significant impact” on its ability to audit the business as a result of the edtech company’s persistent refusal to give the auditor with financial data.