Byju's lenders appoint Kroll to help safeguard assets of Great Learning, Singapore entity

Mumbai: Lenders of Byju's have appointed risk advisory firm Kroll to protect assets at both Great Learning Education Pte. and the edtech firm’s Singapore entity Byju’s Pte. Ltd.

The move comes at a time when the edtech decacorn is looking to monetise some of its assets including children's reading platform Epic and higher education learning provider Great Learning to repay lenders.

Cosimo Borrelli and Jason Aleksander Kardachi have been appointed to oversee the task, Kroll said in a statement on Wednesday. 

Kroll provides services and digital products related to valuation, governance, risk and transparency. Borrelli is Kroll’s global co-head of restructuring and Kardachi leads the firm’s work in Singapore and South-East Asia.

“The appointment was made on behalf of secured creditors of Byju’s Alpha Inc, as part of the secured lenders’ exercise of their security rights following defaults by Byju’s Alpha Inc. A primary focus of the appointment is to protect and preserve the assets and businesses owned by Great Learning (including its subsidiary, Northwest Education Pte. Ltd. (“Northwest Education”)) and BPL,” the release said.

The operations of Great Learning and Northwest Education are not impacted by the appointment, and all courses and programmes offered by these businesses will continue as usual.

The decision to safeguard the assets comes after the management and founders of Great Learning were said to be exploring a management buyout to ensure the business continues to maintain growth momentum. Mint on 5 October had reported the founders’ plans to create a syndicate to bid for the company.

The buyback is part of Byju’s efforts to monetise some of its better earning assets to pay back its term loan B lenders. The edtech decacorn is also in advanced talks to sell US-based kids’ reading platform Epic, a deal which is likely to close first.

Great Learning, domiciled in Singapore, was founded by Mohan Lakhamraju, Hari Krishnan Nair and Arjun Nair. The founders sold a controlling stake in the company to Byju’s in 2021 for a cash and stock consideration of $600 million. The deal included several milestone payments as well.

As per the release, Kroll is working closely with the management of Great Learning and subsidiary Northwest Education to ensure the continued delivery of learning experiences and is committed to the smooth operations and continued growth of their business. “Lakhamraju, founder and chief executive officer of Great Learning continues his leadership of the Great Learning business and management team,” it said.

“I am happy to see the Kroll team's commitment towards Great Learning's high-quality education and continued growth and look forward to collaborating with them towards the realisation of our mission of enabling career success through transformative learning," Lakhamraju said.

A spokesperson for Byju's declined to comment.

Early last month, Byju’s placed Epic and Great Learning for sale as the edtech giant is trying to mend fences with its lenders by paying off a $1.2 billion loan it raised in November 2021.

The two assets may together fetch Byju’s around $800 million to $1 billion, which will be used to advance the repayment of its outstanding term loan B (TLB), Mint reported.

The sale of assets also comes when the company is grappling with the rising cost of debt and rising concerns over poor corporate governance framework at the company.

Three of its non-promoter board members and its statutory auditor Deloitte resigned in June, citing the company’s failure to maintain governance standards as it grew in scale. At the centre of it was the delay in filing the financials for FY22.

The company is likely to share its audited financial results for FY22 in a meeting it has convened with its board and some invitees mid-October. It is likely to be ready with its FY23 financials by 31 December.