$200mn to Blackstone. Byju’s August deadline to pay

Mumbai : Byju’s needs to pay around $200 million to US private equity giant Blackstone Inc by next month as part of its acquisition of Aakash Educational Services Ltd (AESL), said two people familiar with the matter.

India’s most valuable startup announced the acquisition of AESL in April 2021 in a deal worth around $1 billion. The transaction involves 60-70% payment in cash to both Blackstone and the Chaudhry family, who founded Aakash. The balance is planned to be paid out in the form of Byju’s shares.

As part of the deal, Byju’s was to buy Blackstone’s stake in test readiness leader AESL by June, but both sides agreed to a two-month delay.

On 4 July, Byju’s said that he had approved the payment to the Choudhury family. But it did not include payments to Blackstone.

Before the Byju’s deal, Blackstone owned about 38% of AESL and the rest was owned by the Chaudhry family.

Bloomberg reported Monday, citing a Byju’s spokesperson, that the company has yet to receive $250 million from Oxshot Ventures and Sumeru Ventures for “macroeconomic reasons.” The payment of both investors is part of an $800 million fundraise announced by Byju’s. March that valued the firm at $22 billion.

Meanwhile, the three parties have filed separate documents in the National Company Law Tribunal (NCLT) for the merger of AESL with Think and Learn Pvt. Ltd., parent of Byju’s.

One of the two people mentioned above said the deal is “on track” to close by the end of August as planned. However, any delay in getting approval from NCLT can prolong the process.

While the cash payments are due by August 23, the filing of the merger depends on the NCLT schedule and may extend till September, another person said.

Blackstone and Think & Learn declined to comment.

Blackstone will also receive additional shares of 0.75% to 1% in Byju’s once the NCLT merger process is approved, as reported by Mint on July 6. Blackstone’s Strategic Opportunities Fund holds an unspecified stake in Byju’s, which separately invested in the company in June 2021 as part of a funding round of about $340 million.

Byju’s is also backed by Silver Lake Management, Naspers and Mary Meeker’s Bond Capital. There are around 115 million students using the edtech firm’s online learning platform, of whom 7 million are annual customers.

For Byju’s, the closing of the Aakash deal comes in the middle of a ‘funding winter’ for the startup ecosystem. This will be the biggest acquisition ever for Byju’s. Established in 2011, the Bengaluru-based firm has so far acquired over 20 companies across multiple geographies.

In recent weeks, Byju’s has also been attempting a more ambitious takeover campaign for Nasdaq-listed 2U. Mint reported on July 5 that Byju’s plans to raise $2.4 billion in acquisition finance for the deal.

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