According to people directly aware of the ongoing negotiations, Byju’s has offered to repay the funds it has so far availed of from the sanctioned loan, along with the interest on that amount.
Davidson Kempner (DK), however, is seeking interest on the entire amount for a period of one-two years instead of a quarter as proposed by the edtech firm’s founder, Byju Raveendran, they said.
Also read |Davidson Kempner sends legal notice to Byju’s arm Aakash for loan covenant breach
“The talks are centred on the exact pay-out,” said a person in the know. “It will depend on what both parties agree on, eventually. It is also possible the final settlement pay-out could be somewhere in between,” he added.
“DK essentially wants to get its money out of Byju’s and close the episode,” another person said.
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Also read | Byju’s yet to receive entire Rs 2,000 crore from Davidson KempnerA formal proposal by the two parties is expected this week, the persons said.
Meanwhile, Manipal group chairman Ranjan Pai has finalised an investment of around $80 million in Aakash which will be used to repay DK, the people said. Pai will be buying a stake in Aakash from Raveendran, they said.
An email sent to Byju’s did not elicit any response till press time Monday while a spokesperson for DK said it won’t comment on the matter. Pai declined to comment.
Also read | More trouble for Byju’s as three board members, auditor Deloitte resign
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Currently, Raveendran owns a nearly 70% stake in Aakash — personally and through Byju’s parent Think & Learn Pvt Ltd. The chain of physical coaching centres, which Byju’s acquired two years ago, is the crown jewel for the edtech firm amid fading growth in online-only courses.
On May 12, Byju’s signed a Rs 2,000 crore (about $250 million) structured credit deal with DK against the cash flows of Aakash.
Also read | Byju’s and the debt trap haunting Indian tech startups
It has received only about Rs 800 crore from the loan, as ET reported on June 28. People in the know said Byju’s had used more than Rs 600 crore from the credit facility. The talks to return the money to DK were triggered due to the breach of the loan term covenant at the end of June.
Amid these developments, Raveendran’s family members and Byju’s executives have resigned from Aakash’s board, as reported by ET on August 4. While the names of the new members for the board are being finalised, Byju’s is in the final process of inducting two of its nominees, Ambika Sharma and Ajay Khanna, on the Aakash board.
Meanwhile, Byju’s had written to Aakash founders — the Chaudhry family — and investment fund Blackstone asking them to honour the pending stock swap part of the deal announced two years ago. The Chaudhrys and Blackstone have opposed the demand, citing breach of terms including a delay in furnishing the fiscal 2022 audited financials of Byju’s parent firm.
Even as Byju’s holds negotiations to give an exit to DK, it is also slated to have meetings with lenders to finalise and sign new terms for a $1.2 billion term loan B it had taken.
Also read | Byju’s, lenders aim to strike new pact for $1.2 billion loan by August 3
Last month, creditors who own about 85% of the loan amount said they had agreed to close the terms after discussions with the edtech firm. As per their statement, the terms were to be signed by last week, but a formal announcement is yet to be made by either party.
Byju’s filed its audited FY21 financials after an 18-month delay on September 14 last year, which showed a loss of Rs 4,588 crore on revenue of Rs 2,280 crore.
Raveendran and newly appointed chief financial officer, Ajay Goel, had promised shareholders on June 24 that the audited FY22 financials would be filed by September this year, and audited FY23 results by December 2023.