In a relief to Byju’s, Ranjan Pai, the chairman of Manipal Education and Medical Group, has purchased the debt investment of Davidson Kempner Capital Management in Aakash Educational Services.

Aakash is the test prep subsidiary of Byju’s, acquired in 2021.

The transaction reportedly saw Pai buying all the non-convertible debentures (NCDs) of Davidson Kempner in a bilateral deal.

An entity of the MEMG Family Office purchased all the NCDs of the US hedge fund on the NSE Cbrics platform.

In May this year, Byju’s entered into a Rs 2000-crore structured credit deal with Davidson Kempner against the cash flows of Aakash.

However, it received only Rs 800 crore due to an alleged loan covenant breach. Of the Rs 1,400 crore that is being invested by Pai, Rs 800 crore is the principal amount and the rest is the interest.

After the latest investment, Pai may end up having around a 20 per cent stake in Aakash.

He may reportedly also purchase part of Aakash’s promoters’ stake in the company, apart from that of Blackstone which may exit the company.

According to a Moneycontrol report, this will take his effective shareholding in Aakash to nearly 30 per cent.

It added that while Aakash’s promoters, the Chaudhry family, still hold 18-20 per cent of the company, around 25 per cent of this stake will be sold to Pai at a valuation of $10 billion.

Some of the Chaudhry’s shares will be converted into the shares of Byju’s parent Think & Learn.

Byju’s parent had recently reported narrowing of operational losses in its core business to Rs 2,253 crore for the 2021-22 fiscal.

In the previous year, its EBITDA (earnings before interest, taxes, depreciation & amortisation), had stood at Rs 2,406 crore.

US court blow

A Delaware court has upheld the takeover of Byju’s Alpha by US-based Term Loan B lender, sources said.

Byju’s Alpha is a US-based subsidiary of Byju’s.

The court ruled that lenders were within their rights to replace a relative of Byju’s founder Byju Raveendran on the board of Byju’s Alpha with their nominee.