BYJU'S founder in talks to sell controlling stake in Aakash
BYJU'S CEO Byju Raveendran, is in talks with private equity firms like Bain Capital and KKR about selling a controlling stake in Aakash Educational Services Ltd (AESL), the Economic Times has reported. This news comes as certain equity firms, including Carlyle, are reportedly interested in backing Aakash Chaudhry, former CEO of AESL, in buying back the company. AESL was sold to to BYJU'S parent company Think and Learn Pvt Ltd (TLPL) in 2021 for $950 million in stock and cash.
Stake sale requirements and valuation expectations are being discussed
So far, most private equity firms approached have shown interest in deals that involve change in management and require at least 51% of the stake to be sold to them. Raveendran is hoping for a valuation of Rs. 7,000-8,000 crore for AESL, which is in line with the acquisition price when AESL was bought. The ongoing discussions depend on factors like valuations, due diligence, shareholders' approval, and consent of hedge fund Davidson Kempner (DK), which is owed $96 million.
There is a potential return of Aakash Chaudhry as CEO
Interestingly, these stake sale talks come at the same time as reports suggesting that BYJU'S has reached out to Chaudhry for his possible return to the company as CEO. This potential move is connected to finalizing the long-awaited stock-swap agreement with BYJU'S that was initially announced as part of the 2021 acquisition deal. Chaudhry will replace Abhishek Maheshwari, who left AESL last month.
Financial support is expected from Ranjan Pai
To help clear lenders' dues, Ranjan Pai, Chairperson of the Manipal Group, has agreed to provide financial support to Raveendran. Pai has extended about Rs. 900 crore in loans and is tipped to provide additional equity. He is reportedly considering a $100 million equity investment through secondary stock purchases from Raveendran and a $170 million structured debt investment to help BYJU'S clear dues to DK. These financial arrangements are likely to result in a dilution of Raveendran's stake in AESL.
