Edtech Giant BYJU’S In Talks With PE Firms For Aakash Sale

Byju Raveendran-led edtech giant BYJU’S which is besieged by numerous challenges seems to now be selling its crown jewel – Aakash Educational Services Limited – to get a lifeline. 

The edtech decacorn has held talks with PE firms such as Bain Capital and KKR to discuss the sale of Aakash, an ET report said. 

PE firms such as Carlyle are eager to support Aakash Chaudhry, former CEO of Aakash and his family, to buy back the firm from Think & Learn Private Limited (BYJU’S). 

BYJU’S has however denied selling of Aakash to the national daily. 

In 2021, Chaudhry and his family along with PE firm Blackstone, sold Aakash to BYJU’S for $950 Mn – marking the biggest acquisition by an edtech in India. 

At present, BYJU’S parent, Think & Learn Private Limited, is the dominant stakeholder in Aakash with 40% stake, followed by BYJU’S CEO Byju Raveendran with a 30% share. The Chaudhry family, hold an 18% stake, and Blackstone possesses the residual 12%.

These talks are at a preliminary stage and will only materialise after a long due diligence procedure. The talks also involve Ranjan Pai, who is said to be investing $100 Mn in equity and an additional $170 Mn in structured debt to help BYJU’S clear $96 Mn in dues to hedge fund Davidson Kempner.

Manipal Group’s Pai is also likely to bring in more private equity firms to the cap table to help BYJU’S navigate the current difficulties.

 It is worth noting that Pai has ramped up his involvement in Indian startup ecosystem. Lately, the Manipal Group chairman is currently in discussions to invest in various startups such as FirstCry, Bluestone and Pharmeasy, among others

This development closely follows reports that hint at the potential return of Chaudhry to his role as CEO of Aakash.

BYJU’S Endless Troubles

This is not the first time that BYJU’S has held talks to sell one of its assets to clear its dues and get additional capital to run its operations. As per multiple sources, BYJU’S has been trying to sell Great Learning and Epic for $800 Mn – $1 Bn. 

The sale of Epic and Great Learning was part of the proposal BYJU’S made to its Term Loan B lenders, the sources added. In November of 2021, BYJU’S took a term loan of $1.2 Bn and has been ferreting ways to repay it. 

Out of the $1.2 Bn Term Loan B, BYJU’S has about $500 Mn left and the sale of Epic and Great Learning will allow the edtech giant to clear the loan and give it some room for negotiations with other lenders. 

Besides this, the edtech giant is also cutting around 4,000 workforce in another round of layoffs, to cut costs and increase its cash runaway. The edtech giant which is undergoing a massive restructuring exercise from top to bottom, is yet to file its FY22 financials.