Pai would provide Byju's parent with a borrowing facility of 300 crore

 Pai would provide Byju's parent with a borrowing facility of 300 crore

Mumbai: According to two people with knowledge of the transaction, Manipal Hospitals Group founder Ranjan Pai has offered Byju's parent company, Think & Learn Pvt. Ltd, a $300 million financial facility as part of a larger deal that is anticipated to facilitate the Chaudhry family's partial exit from Aakash Educational Services Ltd.

According to one of the aforementioned sources, Pai's overall stake in the company might approach $300 million if the acquisition goes through as planned. According to those previously mentioned, several aspects of the agreement are still being discussed.

According to the two persons described above who asked to remain anonymous, Byju's working capital and cash flow needs would be filled by the 300 crore in short-term financing.

In the recent months, Byju's has sought to minimize the number of senior management workers in order to lower its working capital requirements. In order to reduce expenses, Mint announced on September 26 that it was laying off 4,000 people.

Pai's investment in the company will mostly aid in the repayment of a loan that the company took out from US-based investor Davidson Kempner with strict restrictions, which will be applied to the cash flow of Aakash Educational Services.

In May of this year, Davidson Kempner promised a loan of 2,000 crore but ultimately delivered just 800 crore to the online teacher. After it became clear that Think & Learn had violated several conditions by taking legal action against its foreign term loan lenders, the whole amount was not extended.

Pai's investment in Aakash will aid in the repayment of this $800 million to Davidson Kempner, as well as $600 million in interest, possibly resolving a difficult problem for the business.

More importantly, as part of this deal, the founding family of Aakash will exchange some of their Aakash shares for Think & Learn shares.

In January 2021, the Chaudhry family and Byju's agreed to sell Aakash for about $950 million in cash and stock. The share swap, however, was postponed for two years due to problems with lenders, auditors, and investors, and on 1 August, Mint reported that the Chaudhry family decided not to exchange their shares with the parent Think & Learn.

One of the aforementioned individuals said, "A settlement is currently being negotiated."

According to the individual stated above, as part of the settlement, Think & Learn could exchange some of Chaudhry's shares for its own, raising its possible ownership of Aakash to above 51%.

Davidson Kempner's spokeswoman refused to comment, while Byju's did not return calls or emails left on Sunday. Attempts to reach Aakash Chaudhry and Ranjan Pai for comment on Sunday were unsuccessful. Byju's is scheduled to disclose its financial results for FY22 the following week.

Byju's has also taken action to pay down a $1.2 billion debt that is still due that it obtained from foreign lenders in November 2021. It is attempting to sell two assets, Epic and Great Learning, to aid with the payments, according to a September report from Mint.