ET had first reported on October 12 that Pai, who is investing through his family office, was likely to cut a much bigger cheque for Byju’s Aakash as part of a multi-stage investment plan. Pai’s investment talks had initially begun with the idea of infusing about $70-80 million.
In May, Byju’s had signed a Rs 2,000-crore ($240 million) structured credit deal with Davidson Kempner against the cash flows of Aakash Institute. The Bengaluru-headquartered edtech firm had, however, only received about Rs 800 crore ($96 million), when an alleged covenant breach was triggered by the lender. Soon, both parties began talks to settle the dispute.
Of the Rs 1,400 crore being paid to Davidson Kempner, Rs 800 crore is the loan amount and the remaining Rs 600 crore is in interest, people in the know added.
An email sent to Davidson Kempner didn’t elicit an immediate response while Pai declined to comment.
Pai’s investment in Aakash is also linked with the promoter of the brick-and-mortar coaching centre business, Aakash Chaudhry, who is likely to return as CEO of the unit. This will be alongside his completing the share-swap in Byju’s parent Think and Learn, as part of the original deal announced two years back. ET had reported on October 12 that Pai had engaged private equity firms to invest in Aakash once the pending share swap closed with the Aakash promoters. Blackstone is another key investor in Aakash, with a stake of about 12%.
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Over the next 30-45 days, Pai is likely to close ongoing investment talks for Aakash, which will eventually give him a 25-30% stake in the company. HIs investments will be in Aakash and not in Think and Learn.In 2021, Byju’s had acquired Aakash Institute for $950 million, its biggest acquisition, as part of an aggressive M&A strategy. The original deal constituted 70% cash and 30% equity. After a shareholder tussle, the stock-swap with the Chaudhry family is now in the final stages.
Read ETtech’s detailed coverage on Byju’s