Ranjan Pai buys out Byju's Rs 1,400 cr debt with Davidson Kempner

Manipal Education and Medical Group Chairman Ranjan Pai has also secured a seat on Byju's subsidiary, Aakash

In a Rs 1,400-crore deal, Manipal Education and Medical Group chairman Ranjan Pai has acquired the debt investment of Davidson Kempner in edtech giant Byju's, according to a report by MoneyControl. The transaction, which concluded on Friday, includes Pai securing a board seat on Byju's subsidiary, Aakash. This move brings an end to the longstanding disputes between Byju's and investment management firm Davidson Kempner, offering financial relief to the edtech firm.

The deal involved 70 per cent in cash and the rest in equity for Aakash promoters and Blackstone. However, due to a decline in Byju's valuation, there was reluctance to swap shares with Think and Learn, Byju's parent entity.

Byju's acquired Aakash Educational Services for nearly $1 billion in 2021, making it one of the company's most successful acquisitions. The capital from Pai was expected to help Byju's release the pledge on shares of Aakash, which were offered as collateral for the Davidson Kempner loan. Media reports also suggest that Aakash Chaudhry may return as chief executive officer of Aakash Educational Services. He would replace Abhishek Maheshwari, Aakash's former CEO and CFO, who left Aakash Institute.

Ranjan Pai, an entrepreneur and investor, was one of Byju's early investors, initially investing in 2011 through his venture capital fund, Aarin Capital. Pai also runs the Manipal group of educational institutions. He has also recently given up his stake in Manipal Hospitals to Singapore's Temasek. This was one of the largest deals ever to be conducted in the healthcare sector by an Indian equity fund.

By acquiring Davidson Kempner's debt, Pai's deal brings relief to Byju's, which faced financial challenges following a technical default on the $250 million loan raised from Davidson Kempner in May.