Ranjan Pai Acquires Rs 1,400 Crore Debt Raised by BYJUs from Davidson Kempner

In a significant move, Manipal Education and Medical Group Chairman Ranjan Pai has acquired a Rs 1,400 crore debt raised by edtech major BYJU'S from Davidson Kempner. This settlement includes a penal amount claimed by Davidson Kempner against debt investment of USD 100 million, or about Rs 800 crore.

The Dispute

BYJU'S had entered into an agreement with Davidson Kempner in March to raise USD 250 million, of which it received USD 100 million in the first tranche. However, after the dispute of the edtech firm with USD Term Loan B TLB lender, the rest of the money from Davidson Kempner was not released.

The dispute between Davidson Kempner and BYJU'S arose after the edtech firm did not pay installments due to US-based TLB lenders. The agreement between Davidson Kempner and BYJU'S was for USD 250 million debt investment, but after the dispute with TLB lender, the rest of the USD 150 million investment did not come into BYJU'S account.

Ranjan Pai's Acquisition

Ranjan Pai's family office has taken over the debt exposure of Davidson Kempner in Aakash Educational Services Ltd AESL, as he partners with primary shareholder BYJU'S and its founder Byju Raveendran in steering the leading tutorial chain forward. This investment from Pai brings relief to BYJU'S by ending a long-pending dispute between the edtech firm and Davidson Kempner.

Pai has paid out Davidson Kempner in a bilateral debt transaction. An entity of Pai purchased all the NCDs of Davidson Kempner on NSE Cbrics platform. The transaction concluded on Friday, sources said.

Significance of the Acquisition

The loan dispute with Davidson Kempner was a corporate hangover on AESL, and its settlement, along with Pai's entry, marks significant milestones for Think and Learn as it navigates a business restructuring amid a challenging macro funding environment. Pai is also in discussions to buy additional stakes in AESL shortly.

Ranjan Pai's proprietary fund, Aarin Capital, was the first institutional investor in BYJU'S in 2013. The latest development paves the way for Byju Raveendran and Pai to work with Think and Learn shareholders in strengthening AESL's corporate framework as well as its offline and online market presence.

The acquisition of BYJU'S debt by Ranjan Pai is a significant development in the edtech space. It not only resolves the dispute between BYJU'S and Davidson Kempner but also brings in a strategic partner with deep expertise in the education sector. With Pai's involvement, AESL is poised for further growth and success in the competitive edtech landscape.