During the pandemic and mostly in the immediate post-pandemic industrial scenario, Byju’s was one of the prominent names echoing around with good revenue digits and innovative initiatives.
From creating a novel virtual world for the edtech industry to on-boarding dream stars as their brand ambassadors to the evolution of many of its subsidiary arms with a pretty well finance background, Byju’s topped the list of startups with a golden glow of unicorn status and entered in the Forbes rich list.
But in recent times, precisely for so many months earlier this year, the edtech major is stumbling from one crisis to another. Beginning from the Enforcement Directorate’s raid, loan repayment issues with investors, continuous resigning of major board members, thousands of layoffs, lawsuits and the endless troubles had created a dark future for the edtech player.
The list got elongated as in last month its $22 billion valuation was under pressure after big-name investors like BlackRock marked it down in their private assessments. BlackRock has reportedly been marking down the valuation of Byju’s since June last year.
Amidst all these chaotic situations, now a ray of light has appeared to be with the firm. Recently, Ranjan Pai, the founder of Manipal Hospitals Group, has offered a $250-300 million financial facility to Byju’s parent, Think & Learn Pvt. Ltd, as part of a broader transaction that is expected to facilitate a partial exit for the Chaudhry family from Aakash Educational Services Ltd, according to reports citing two people aware of the deal.
The short-term financing is expected to help plug Byju’s working capital and cash flow requirements. Reports were there that Pai’s investment in the group will largely help repay a loan taken by the group from US-based investor Davidson Kempner at onerous terms against the cash flows of Aakash Educational Services.
Adding one more in this line-up, Six of BYJU’S biggest investors have reportedly formed an informal working group to engage with the edtech giant, track its progress and provide suggestions. The group was formed a few weeks ago and consists of General Atlantic, Prosus, Peak XV, Chan Zuckerberg Initiative and Prosus stepped down from BYJU’S board.
Moreover, as per available sources, Aakash Chaudhry, promoter of the brick-and-mortar coaching network firm, is likely to come back as the chief executive of Aakash. He was the CEO till November 2020, and later resigned from the board last December.
Reportedly, the comeback is part of the major arrangement being finalised between Byju’s and Aakash. And now, the Aakash promoter group is near to executing its share-swap in Byju’s which will give him around 8% in Think and Learn – the parent of Byju’s, whereas Chaudhry is likely to retain around 9% in Aakash.
Last month, Mint had reported that the Chaudhry family agreed to sell Aakash to Byju’s in January 2021 for over $950 million in cash and shares. But the share swap never happened for two years, and following the parent entity’s struggles with the lenders, auditors and investors, the Chaudhry family declined to swap their shares with the parent Think & Learn.
Also, about the $1.2 billion term loan repayment, Byju’s had made a surprise repayment proposal to lenders last month, in which the firm has offered to repay its entire $1.2 billion term loan in less than six months. The edtech company put forth the agreement to repay $300 million of the distressed debt within three months if the amendment proposal is accepted and the remaining amount in the subsequent three months.
With Byju’s constantly being in the spotlight, not for good reasons for the past few months, has now showing signs of recovery. In a meeting conducted right after announcing the layoffs and high-profile exits from the company’s board, Byju’s CEO Byju Raveendran had promised the employees, “We are in a tough phase, but we will bounce back soon.”
