ETtech looks at some of the key developments at Byju’s:
Share-swap and new CEO: Chaudhry’s comeback is part of a broader arrangement being finalised with its owner Byju’s. He is also in the final stages of talks to close a stock-swap deal with Byju’s as part of the acquisition, sources told ET. Chaudhry will replace Abhishek Maheshwari, who left Aakash Institute last month.
“The talks to resolve the shareholding issue has been underway for a while and as per current discussions, Chaudhry is likely to end up with around 1-2% in Think and Learn (parent of Byju’s) at about $11-12 billion valuation while he will retain around 9% in Aakash,” a source told ET.
Ranjan Pai’s involvement: Manipal Education and Medical Group chairman Ranjan Pai may invest as much as $250-300 million in Aakash Institute, ET reported on October 12. Sources had told ET that Pai was close to infusing $170 million in the first stage, up from his initial plan of around $70 million.
This new capital infusion will be used to clear Byju’s outstanding debt to US-based Davidson Kempner (DK). In May, Byju’s signed a Rs 2,000-crore structured credit deal with DK against the cash flows of Aakash Institute.
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Job cuts, merging businesses: Arjun Mohan, a former executive at Byju’s, was recently brought back to head the edtech’s India business. His initial focus will be on stabilising the firm, including cutting the headcount by a third or about 4,000-4,500 people, and merging several business verticals. People in senior roles might lose their jobs as the firm aims for a leaner structure. Also, a source had told ET that Byju’s “wants to bring more students to offline centres and that’s the main way the new management has identified to run operations that can sustain over a period of time”.
The $1.2 billion term loan: Missed interest payments, suits and countersuits have swirled around the $1.2 billion term loan Byju’s raised in late 2021. Last month, a Bloomberg report said the edtech had made a surprise repayment proposal to lenders, in which the firm has offered to pay back its entire loan in less than six months.
ET reported on August 9 that Byju’s may have to pay an additional $50-60 million annually in interest on its $1.2 billion term-loan facility as part of new terms with lenders.
Assets up for sale: Byju’s has put two of its key assets – Epic and Great Learning – on the block, hoping to generate $800 million to $1 billion in cash, to help meet its commitment to clear the term loan. It is working with bankers to sell the assets to strategic investors.
The edtech is expecting to raise $400-500 million from the sale of Epic, a US-based kids’ learning company it acquired in July 2021, and another $500-600 million from the sale of higher education and upskilling firm Great Learning.