The edtech unicorn Byju’s lenders have called off the negotiations with the company to restructure a $1.2 billion loan, according to a Bloomberg report. Citing the people aware of the matter, the report stated that talks were called off after the creditors moved court, accusing the firm of hiding $500 million of funds raised through its US-based subsidiary Byju’s Alpha.

Lenders can now sell the term loan B (TLB) securities of the firm as the restraint that came as part of the negotiations is lifted, they said. Adding on, the TLB was raised in 2021, with an aim to utilise the raised funds to drive growth and expansion in its global operations. The loan is due in 2026. Byju’s had earlier said it has fulfilled all its contractual payment obligations as agreed upon in the TLB and has not missed a single payment there under. The transfers, the firm had said were in full compliance of and did not contravene any terms of the parties’ credit agreement and agreed upon rights and responsibilities.

As per the report, they will try to reach out to all lenders independently to renegotiate the terms. Byju’s lawyer, in a US court last month while denying allegations of hiding the funds raised as loan, had said that the company will get ‘a large capital infusion’ soon that will allow it to pay down the loan.

Byju’s, which had come under heavy market scrutiny for a significant delay in filing its FY21 results, offered to increase the coupon on loan due 2026 by as much as 300 basis points and prepay part of the debt to renegotiate the agreement.

By late April Byju’s had also come under the radar of ED, which conducted search and seizure actions in three of its Bengaluru premises under the provision of Foreign Exchange Management Act (FEMA).