Edtech major Byju's Rs 1,500-cr payment to Blackstone by September-end

Edtech major Byju’s payment of nearly Rs 1,500 crore to private equity firm Blackstone as part of the $950-million Aakash Educational Services (AESL) deal is on track, according to the sources.

They said this was the final tranche that Byju’s had to pay to Blackstone and the payment would be complete by the end of September this year. Byju’s has made partial payments to Aakash’s shareholders. In all, Blackstone, an investor in Aakash, was to receive $400 million.

The most-valued edtech start-up made headlines earlier this month after its FY21 numbers received an unqualified report from the company’s auditor, Deloitte Haskins & Sells.

According to the company sources, the media reports about Byju’s delaying FY21 results created a notion that the edtech firm didn’t have funds to pay Blackstone.

“Based on the mutual understanding between the two companies, the remaining tranche of Rs 1,500 crore would reach Blackstone by this month- end,” said a person familiar with the matter. “Byju’s has been paying steadily as per the schedule. Only the final tranche to Blackstone got a bit deferred and the investors are fine with it.”

According to the sources, this tranche got deferred due to some regulatory diligence.

Last year, Byju’s closed the deal to acquire AESL for nearly $1 billion. The stock-and-cash deal was the biggest in the education space. In 2019, Blackstone had picked up 37.5 per cent stake in Aakash for Rs 1,350 crore, valuing it at $500 million, according to the sources.

“As per the terms of the agreement for the acquisition of Aakash Educational Services, consideration to the extent of Rs 1,983 crore was due to be paid by the company to the sellers in June 2022. This has been deferred to September 23,” according to Byju’s official financial report.

Byju’s and Blackstone declined to comment on the final tranche that has to be paid.

Byju’s, which is valued at $22 billion, recently said it had earned Rs 2,428 crore in revenues in FY21 and incurred a loss of Rs 4,588 crore. The adjusted revenue of Byju’s in FY20 was Rs 2,511 crore and the adjusted loss was Rs 300 crore.

The results have been a subject of intense scrutiny, coming 18 months after the period of coverage ended in March 2021 and prompting the Ministry of Corporate Affairs to ask the company to explain the delay. Byju’s did not keep to three or four deadlines, all self-imposed, for announcing its results, reportedly because its auditor was not signing off on the accounts.

Byju Raveendran, founder and CEO of Byju’s, recently told employees the firm had already started shifting its focus toward profitable growth. He said revenue of $2 billion was within sight of the firm.

The Bengaluru-based firm has a 50,000 employee base globally.