(Bloomberg) -- Byju’s, India’s most valuable startup, plans to make a quarterly interest payment of about $40 million on a loan that has been at the center of the beleaguered firm’s financial troubles, according to people familiar with the matter.

The edtech firm expects to pay on Monday to meet the June 5 deadline, the people said, asking not to be named because the information isn’t public. The situation is still fluid and plans could change. Failure to pay on that date means the $1.2 billion loan will default. 

Byju’s didn’t respond to requests for comment about the coupon payment. Representatives for Houlihan Lokey Inc., which was hired by creditors to advise them on the loan, declined to comment. 

The $1.2 billion debt is the largest unrated loan by a startup ever. The once high-flying company led by former teacher Byju Raveendran had been trying to strike a deal with creditors to restructure the loan, after the decline of the pandemic-era boom in online tutoring dealt a blow to its finances. 

But creditors demanding an accelerated repayment scrapped the long-running negotiations, Bloomberg reported last week. The lender consortium has signed a cooperation agreement that binds them to act together in negotiations, the people added. 

The loan, which slumped to a record low of 64.5 cents a dollar in September, is now quoted at around 78 cents, according to data compiled by Bloomberg. 

Making the coupon payment on time will give the company enough wriggle room to wait for “a large capital infusion” that its lawyer said would be used to pay down the loan. The company is current on all debt payments, and any defaults should be considered technical breaches of the loan agreement, according to the firm.

The firm has missed deadlines to file financial accounts for the year to March 31 and its offices were searched by India’s agency that investigates violations of the nation’s foreign exchange policies. 

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