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As part of a broader deal that is expected to facilitate a partial exit for the Chaudhry family from Aakash Educational Services Ltd, Ranjan Pai, the founder of Manipal Hospitals Group, has offered a Rs 300 crore financial facility to Byju’s parent, Think & Learn Pvt Ltd, according to a report by Mint.
The short-term financing of Rs 300 crore will help take care of Byju’s working capital and cash flow requirements. Negotiations are still taking place on some parts of the deal.
A source told Mint that Pai’s total investment in the group might reach $300 million if the deal is finalised.
To decrease its working capital needs, Byju’s has looked at cutting back on senior management employees. On 26 September, a report by Mint suggested that the company was letting go of 4,000 employees to cut costs.
The funding by Pai will be used to repay a loan taken by the group from US-based investor Davidson Kempner against the cash flows of Aakash Educational Services. In May this year, Kempner had offered a loan of Rs 2,000 crore but had only transferred Rs 800 crore to the edtech firm. After reports emerged that Think & Learn escalated litigation with its overseas term loan lenders, the full loan was not extended.
Pai’s investment into Aakash will help repay this Rs 800 crore back to Kempner, along with Rs 600 crore in interest. This deal will also see Aakash’s founding family swap a part of their Aakash shares into Think & Learn.
In January 2021, the Chaudhry family agreed to sell Aakash to Byju’s for over $950 million in cash and shares. But the share swap never reached its conclusion for two years and after Byju's struggles with investors and lenders, the Chaudhry family refused to swap their shares with the parent Think & Learn.
A source told Mint that a settlement is now being worked out. Earlier in September, Byju's put two of its key companies, Epic and Great Learning, on sale to raise $800 million to $1 billion in cash. The troubled edtech firm is planning to settle a $1.2 billion Term loan B and the sale is part of its plan to honour its financial commitments.
