Ranjan Pai Rescues Byju’s with Rs 1,400-Crore Debt Acquisition Deal

• ByStartupStory     |    November 11, 2023

Manipal Education and Medical Group Chairman, Ranjan Pai, has successfully concluded a Rs 1,400-crore deal to acquire the debt investment held by Davidson Kempner in the prominent edtech giant, Byju’s. According to a report by MoneyControl, the transaction, finalized on Friday, not only involves a substantial cash component but also secures Pai a board seat on Byju’s subsidiary, Aakash. This development marks the resolution of longstanding disputes between Byju’s and investment management firm Davidson Kempner, providing a significant financial reprieve for the edtech firm.

The deal structure comprises 70 percent in cash and the remaining portion in equity for Aakash promoters and Blackstone. However, challenges arose due to a decline in Byju’s valuation, leading to hesitancy in executing a share swap with Think and Learn, the parent entity of Byju’s.

Byju’s, known for its strategic acquisitions, had previously acquired Aakash Educational Services for nearly $1 billion in 2021, positioning it as one of the company’s most successful ventures in this domain. Ranjan Pai’s capital infusion is anticipated to aid Byju’s in releasing the pledge on shares of Aakash, which were offered as collateral for the Davidson Kempner loan.

Media reports further hint at Aakash Chaudhry potentially returning as the Chief Executive Officer of Aakash Educational Services, succeeding Abhishek Maheshwari, the former CEO and CFO of Aakash Institute who recently departed.

Ranjan Pai, a seasoned entrepreneur and investor, holds historical ties with Byju’s, having been one of its early investors back in 2011 through his venture capital fund, Aarin Capital. Additionally, Pai oversees the Manipal group of educational institutions and recently divested his stake in Manipal Hospitals to Singapore’s Temasek, marking one of the largest deals in the healthcare sector conducted by an Indian equity fund.

The acquisition of Davidson Kempner’s debt by Ranjan Pai is a pivotal development, providing much-needed relief to Byju’s, which encountered financial challenges following a technical default on the $250 million loan raised from Davidson Kempner in May. This strategic move not only resolves financial intricacies but also positions Byju’s for continued growth and stability in the dynamic edtech landscape.

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