The board of Aakash Educational Services Ltd (AESL) has been reconstituted amid debt covenant talks with hedge fund Davidson Kempner Capital Management.
The Byju’s arm had reportedly breached certain loan agreement covenants following which Davidson Kempner was not fully disbursing a $250 million loan it had extended to the edtech startup. The funds were raised against the future cash flows of AESL.
The AESL board is being strengthened with three Think and Learn (BYJU’S) nominees and two independent directors, a spokesperson of Byju’s told The Telegraph. Media reports added that while the new board is likely to take charge within a fortnight, the board could look for new auditors and Byju’s founder Byju Raveendran will be the only executive representative of the parent on the AESL board.
This development comes at a time when Think & Learn, the Byju’s parent, has sent a notice to founders of AESL as they are not keen on completing a share swap that was agreed during the sale of the latter. It was in 2021 that Byju’s had acquired AESL, which runs coaching centres for nearly $940 million in a cash and stock deal.
After the deal, Think & Learn owned 43 per cent, while Raveendran had a stake of 27 per cent. The rest of the stake in AESL is held by founder Chaudhry’s family which maintains about 18 per cent and Blackstone the remaining 12 per cent.
Aakash expects to close the financial year 2023 with Rs 3,000 crore revenue, thereby registering three-fold growth since its acquisition by Byju’s. It is also contemplating an initial public offering (IPO).
