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According to industry sources, Pai will get a seat on the board of Aakash Educational Services, which is Byju’s largest asset.
In relief for troubled edtech major Byju’s, Manipal Education and Medical Group chairman Ranjan Pai has bought the debt investment of US-based asset management firm Davidson Kempner in a `1,400-crore deal.
According to industry sources, Pai will get a seat on the board of Aakash Educational Services, which is Byju’s largest asset. He will also have the right to nominate two more representatives. There are currently six members on the Aakash’s board, including two representatives from Kempner, who will exit.
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Of the `1,400 crore paid to Kempner, `800 crore was the loan amount and `600 crore was interest, industry sources said. Kempner, which held 15-20% of Aakash via pledges, will transfer its holding to Pai as part of the transaction. An entity of Pai purchased all the NCDs of Davidson Kempner on the NSE CBRICS platform.
A spokesperson for Byju’s declined to comment.
Kempner had provided Byju’s with $250-million in structured debt in May, based on the future cash flows of Aakash. However, the US-based AMC withheld approximately $100 million because Byju’s was not able to meet some of the loan agreement covenants.
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Industry sources said that Pai plans to also buy out part of Aakash’s promoters’ stake in the company as well as Blackstone’s which is expected to exit the firm. This will take his effective shareholding in Aakash to nearly 30%.
Aakash’s promoters, the Chaudhry family, still hold 18-20% in Aakash. According to sources, one fourth of this stake will be sold to Pai at a valuation of $10 billion, one fourth will be converted to Think and Learn’s (Byju’s parent firm) shares, while the family will retain the rest.
Aakash Chaudhry will return as CEO after the partial stake sale and share swap is completed, sources said. FE
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First published on: 11-11-2023 at 01:22 IST
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