Byju's Crisis: Akash Chaudhry may return as CEO as Pai extends Rs 300 cr loan

Byju's Crisis: Manipal Hospitals Group's founder Ranjan Pai has offered Rs 300 crore loan to Byju’s parent, Think & Learn Pvt. Ltd. As per Mint, this comes as a part of broader transaction deal that would facilitate partial exit of the Chaudhry family from Aakash Educational Services Ltd.

Meanwhile, the promoter of Aakash Educational Services Akash Chaudhry is set to return as CEO of the tutoring unit that Byju’s acquired in April 2021. As per Moneycontrol, Chaudhry will exchange a portion of his ownership in Aakash with Think & Learn Pvt Ltd, the parent company of Byju's

Also Read: Byju's crisis: Postpones final salary settlement for laid off employees to November

Akash Chaudhry - CEO

Akash Chaudhry will take over from Abhishek Maheshwari, who quit as CEO of Aakash last month. The Chaudhry family will continue to hold 8.5% in the tutoring unit and receive about 1% of Think & Learn Pvt.'s shares at less than half of its previous $22 billion valuation, post-transaction.

Meanwhile, Think & Learn Pvt will hold around 51% stake of the company after the deal, reported Economic Times.

Also Read: Byju's crisis: Legal battle postponed; aims for out-of-court settlement

Pai's Investment

As per Mint, the short-term financing of Rs 300 crore will help plug Byju’s working capital and cash flow requirements. This investment will be largely used to pay back loan taken by the group from US-based investor Davidson Kempner at onerous terms against the cash flows of Aakash Educational Services.

Davidson Kempner who had agreed to offer Rs 2,000 crore in May this year, transfered only Rs 800 crore. This after, reports of Think & Learn breached certain covenants by escalating litigation with its overseas term loan lenders emerged.

Now, the Rs 300 crore loan by Pai can help Aakash help to repay this Rs 800 crore back to Davidson Kempner, along with Rs 600 crore in interest.

Also Read: Byju’s accused of hiding $533M in Miami IHOP-linked hedge fund

Byju's-Akash deal

Byju's had acquired Aakash in April 2021 for a mix of equity and cash deal. The deal which was 70% cash component and 30% equity component, would have given promoters of Aakash and private equity firm Blackstone some shares from Think & Learn Pvt.

However, after crisis hit Byju's Akash Promoters asked for full cash settlement instead of shares swap. Byju's to tackle the issue and pay back Davidson Kempner approached Ranjan Pai. Once the deal is finalised, Raveendran, who currently holds approximately 27% in Aakash in his personal capacity, will see his stake reduced to around 9%.