Arbitrator Halts BYJU’S Sale of Stake in Aakash Amid Financial Strain

• ByStartupStory     |    April 6, 2024

In a recent development, an emergency arbitrator has intervened, directing educational technology giant Think and Learn, the parent company of BYJU’S, to refrain from selling approximately 6% of its stake in subsidiary Aakash Education Services Limited. This directive comes in response to a pressing financial matter involving a loan of around Rs 350 crore secured from the MEMG Family Office, led by billionaire doctor Ranjan Pai.

According to sources familiar with the situation, arbitration proceedings were initiated by the MEMG Family Office in March to safeguard its interests, citing BYJU’S failure to repay the substantial loan as agreed upon. The emergency arbitrator, appointed under Singapore International Arbitration Centre rules, issued the directive on April 4, compelling BYJU’S to abstain from transferring or encumbering any rights associated with the specified stake in Aakash Education Services Limited.

A legal representative, speaking on condition of anonymity, affirmed, “The emergency arbitrator has asked BYJU’S not to transfer or create any rights on around six per cent stake in Aakash as per the undertaking given by the company at the time of raising around Rs 350 crore loan from MEMG Family Office.”

Despite attempts to reach out to both BYJU’S and MEMG for comment, no response has been received at the time of reporting.

However, a source within BYJU’S indicated that the arbitration order aims to maintain the status quo and is not expected to undermine the value of either Aakash Education Services Limited or Think and Learn. The source emphasized that the arbitration process initiated by MEMG is procedural in nature, and discussions are underway to resolve the matter in the best interest of both companies.

BYJU’S, like many businesses, has been grappling with financial challenges exacerbated by the COVID-19 pandemic. Reports suggest that the company has been encountering difficulties in meeting its financial obligations, including the payment of employee salaries.

This latest development underscores the complexities faced by prominent players in the edtech sector, serving as a reminder of the significant financial pressures brought about by the ongoing global health crisis. 

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