Ranjan Pai resolves BYJU's debt dispute with Davidson Kempner by acquisition of Rs 1,400 crore debt

Ranjan Pai, Chairman of Manipal Education and Medical Group, has successfully acquired a debt of Rs 1,400 crore owed by the prominent edtech giant BYJU's from Davidson Kempner, news agency PTI reported quoting sources.

The settlement encompasses both the principal debt amount and a penal sum claimed by Davidson Kempner against the initial investment of $100 million, approximately Rs 800 crore. BYJU's had initially entered into an agreement with Davidson Kempner in March to raise a total of $250 million, receiving the first tranche of $100 million.

However, a dispute arose with the $Term Loan B (TLB) lender, leading to a halt in the release of the remaining funds from Davidson Kempner.

"The family office of Ranjan Pai has taken over the debt exposure of Davidson Kempner in Aakash Education Services Ltd (AESL), as he partners with primary shareholder BYJU's and its founder Byju Raveendran in steering the leading tutorial chain forward," sources said, PTI reported.

This strategic investment by Pai signifies a resolution to the long-pending dispute between BYJU's and Davidson Kempner. The disagreement originated when BYJU's failed to meet the installment payments owed to the US-based TLB lenders.

The initial agreement with Davidson Kempner was for a $250 million debt investment, but following the disagreement with the TLB lender, the remaining $150 million investment did not reach BYJU's account.

In a bilateral debt transaction, Pai's family office has paid off Davidson Kempner. "An entity of Pai purchased all the NCDs of Davidson Kempner on NSE Cbrics platform," the source explained.

The transaction was successfully concluded on Friday, paving the way for BYJU's founders and Ranjan Pai to collaborate in fortifying AESL's corporate framework and enhancing its presence both online and offline.

Ranjan Pai is reportedly in discussions to acquire additional stakes in AESL in the near future. Aarin Capital, Pai's proprietary fund, was the first institutional investor in BYJU's in 2013.

This development is significant for Think and Learn, BYJU's parent company, as it grapples with business restructuring amid a challenging macro funding environment. Manipal Global Education, in September, announced its entry into the edtech space with the launch of Manipal MedAce, where they plan to initially invest over Rs 100 crore in content development for the platform.

As of now, there have been no official comments from BYJU's or Ranjan Pai regarding the recent developments.

(With PTI inputs.)