Think & Learn, the parent company of edtech major Byju’s, is reconstituting the board of Aakash Educational Services Ltd. (AESL).
The edtech major has appointed three nominees from Think & Learn and two independent directors.
“The AESL board is being strengthened with three Think and Learn (Byju’s) nominees and two independent directors,” said Byju’s spokesperson, who did not disclose the names of the new board members.
This comes at a time when the edtech major is looking to raise funds. Manipal Group Chairman Dr Ranjan Pai is in early talks to invest in Byju’s owned Aakash through his family office, businessline reported. The funds raised are expected to be used to repay the ₹800 crore due to investor Davidson Kempner after Byju’s had a technical default on the loan it raised in May. Raveendran is also looking to release the pledge on shares of Aakash, which were provided as collateral for the loan.
In 2021, it acquired Aakash Educational Services for nearly $940 million in a cash and stock deal. It was a 70:30 cash-equity deal, under which the promoters of Aakash and Blackstone would receive an undisclosed stake in Byju’s for 30 per cent of the payment.
However, Aakash shareholders have been reluctant to execute the share swap due to Byju’s declining value.
Byju’s has sent a legal notice to the founders of Aakash following their alleged resistance to complete a share swap that was unconditionally agreed to as part of the sale. The shareholders of Aakash had written to the firm, declining to comply with the notice sent by the firm in March to execute the share swap deal, the report added.
“Aakash has a different set of shareholders and can be run on an arm’s length basis from Byjus. A different board could also mean ring-fenced finances and avoiding any fungibility of funds between Aakash and Byjus,” said Shriram Subramanian, Founder of InGovern, a corporate governance advisory firm.