BYJU’S Lenders Seek 30% Stake In Aakash To Settle Legal Battle: Report

Global lenders of the embattled edtech firm BYJU’S are in advanced talks to acquire a roughly 30% stake in Aakash Educational Services, an offline coaching institute partly owned by the group, at a valuation of $2 Bn. 

As per a report by Reuters, lenders plan on dropping all legal actions and allegations against BYJU’S founder Byju Raveendran for a 30% stake in Aakash

The proposed equity transfer is part of the settlement to resolve the long standing legal dispute between bankrupt edtech company BYJU’S and its Term Loan B (TLB) lenders. If finalised, it would mark the conclusion to a high-profile conflict spanning courts across India, Singapore, and the United States. 

This comes days after both the parties testified to the Bengaluru bench of NCLT that they are working on reaching a settlement agreement. The court deferred the case for a further hearing on July 16. 

The issue began in early 2023 when US-based GLAS Trust, acting as a trustee for BYJU’S TLB  lenders, accused Raveendran of fund misappropriation. 

The lenders are seeking some recovery of the over $1 Bn loan extended to BYJU’S in 2021, shortly after the company announced the acquisition of Aakash Institute. While BYJU’S already entered insolvency proceedings in 2024 at the behest of unpaid dues to BCCI, GLAS filed lawsuits in the US. The primary allegation has been that it misappropriated $533 Mn via a US-based subsidiary, BYJU’S Alpha. 

Raveendran and BYJU’S have consistently denied any wrongdoing. 

BYJU’S acquired Aakash in 2021 for approximately $1 Bn and it became the crown jewel of the company’s business. However, as the pandemic-era boom in online education began to fade, BYJU’S rapid expansion resulted in financial pressure that ultimately led to the aforementioned legal battle with its creditors. 

While legal troubles intensified for BYJU’S, Aakash began seeing some financial strain as well. The company had to undertake a rights issue last year to ensure sustenance of its business amid the legal troubles. 

With Aakash being one of the bankrupt companies; few profitable assets, BYJU’S lenders opposed the firm’s ₹500 Cr rights issue last year, to secure Think & Learn’s holding from further dilution. With BYJU’S now holding a minority stake in Aakash, the lenders argued that this stake being further diluted would further degrade the recovery of the creditors. 

Meanwhile, MEMG (Manipal Education and Medical Group) has gradually shored up its holding in Aakash in recent times. It has emerged as the top stakeholder of the competitive exam prep coaching chain with about 60% stake as of now. 

The Supreme Court ultimately allowed Aakash to proceed with the rights issue and asked BYJU’S parent to apply for shares not exceeding the number proportionate to its original shareholding as part of the rights issue. 

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