In the National Company Law Tribunal (NCLT) hearing on Tuesday, Think and Learn, the parent company of Byju’s, and Aakash Educational Services Ltd (AESL) have withdrawn the merger petition.

“The petition to withdraw the merger approval was a pre-planned and mutually-agreed process. Both the companies were running independently as separate entities under the Think and Learn brand and continue to do so. What happened at NCLT today was procedural to complete the required formalities,” said Byju’s spokesperson.

The merger was planned as a part of the cash-and-stock deal, when the embattled edtech Byju’s had acquired the brick-and-mortar test prep company for $940 million.

Byju’s had acquired Aakash in April 2021 in a deal that had a 70 per cent cash component and 30 per cent equity component, meaning, promoters of Aakash — the Chaudhry family, and private equity firm Blackstone would have got shares of Think & Learn. The share swap is meant to complete this deal.

However, the share-swap deal has hit a road block as the Chaudhry family, the founder of AESL, has refused to swap their remaining stake citing governance issues. Byju’s has also sent a legal notice to the founders of the test prep chain due to their alleged resistance to complete the share swap.

The Aakash saga

Aakash Institute, the crowing jewel of Byju’s, has seen its fair share of turmoils. Ranjan Pai, chairman of Manipal Education and Medical Group, has emerged as the single largest shareholder in Byju’s-owned Aakash Institute, with a 39 per cent stake.

This happened after the Aakash board approved the conversion into equity of the $300 million invested by Pai in 2023.

In November 2022, he had invested close to $200 million in Aakash Institute to help Byju’s clear its debt and interest to Davidson Kempner. Raveendran, founder and CEO, Byju’s, had also borrowed capital from the investor to run daily operations at Think & Learn by pledging his personal stake in Aakash.

Currently, Pai holds 39 per cent stake, while Think and Learn holds 26 per cent, Raveendran has 17 per cent stake and the the Chaudhry family and Blackstone holding 10 and 8 per cent respectively.

Byju’s saga

Byju’s is grappling with cash crunch issues as a group of investors has filed an ‘oppression and mismanagement case’ against the company’s management.

The Bengaluru bench of NCLT, in its order passed on February 27, has directed Byju’s that the proceeds from the rights issue is to be kept in a separate account till the disposal of the oppression and mismanagement plea filed by the company’s investors.

The investors sought for a stay of the $200-million rights issue, which was supposed to close on February 29. The investors alleged that they were being forced to participate as their shareholding would be reduced if they did not participate in the issue.

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