Byju’s settles dispute with Davidson Kempner as Ranjan Pai buys out debt in ₹1,400-crore transaction

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Manipal Group Chairman Ranjan Pai has invested ₹1,400 crore in edtech major Byju’s’ test-prep subsidiary Aakash Education Services Ltd (AESL), which will pave the way for the edtech major to clear the debt to the US-based lender Davidson Kempner Capital Management, according to sources.

Of the ₹1,400 crore being paid to Davidson Kempner, ₹800 crore is the loan amount and the remaining ₹600 crore is in interest, people in the know added.

Debt resolution

Pai, the billionaire Chairman of Manipal Group, paid out Davidson Kempner in a bilateral debt transaction. An entity belonging to the MEMG Family Office purchased all the non-convertible debentures of Davidson Kempner on the NSE Cbrics platform, putting an end to the longstanding troubles between the edtech and investment management firm Davidson Kempner, sources added.

In May, the troubled edtech major had signed a ₹2,000-crore structured credit deal with Davidson Kempner against the cash flows of Aakash Institute. However, the firm only received about ₹800 crore when an alleged covenant breach was triggered by the lender. Both parties began talks to settle the dispute.

The investment by Ranjan Pai 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, reported businessline.

Additionally, over the next 30-45 days, Pai is likely to close ongoing investment talks for Aakash, which will eventually give him a 25-30 per cent stake in the company. His investments will be in Aakash and not in Think and Learn.

In 2021, Byju’s acquired Aakash Institute for $950 million, its biggest acquisition, as part of an M&A strategy. The original deal constituted 70 per cent cash and 30 per cent equity.

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