Whose unsecured loan is Byju’s, the world’s most valuable edtech startup ready to take? 300 crore from its subsidiary Aakash Educational Services for ‘core business activities’.
In its latest filing with the Ministry of Corporate Affairs, Aakash Educational Services said it is offering an unsecured loan 300 crores for Think and Learn, which operates byju’swhich is subject to approval.
“The Board of Directors of the Company, in its meeting held on 3rd October, has given its approval for grant of unsecured loans to Think & Learn, subject to the approval of the members at the General Meeting, for an amount not exceeding Rs. 300 crores,” the filing noted.
The loan attracts an interest of 7.50 per cent per annum
byju’s It acquired Aakash Educational Services in April 2021 for a cash and stock deal of approximately $950 million.
However, Byju’s said the loan is actually an advance for marketing activities and campaigns being carried out for Aakash.
“The 300 crore loan from Aakash Educational Services Limited is actually an advance against the marketing activities and campaigns that BYJU’S is running for Aakash. To benefit from economies of scale, BYJU’S buys media spots in bulk for all of its group companies. It is a strategy that has really yielded positive results for both the groups and Aakash.”
“BYJU’s Aakash has grown by over 100% since the acquisition. Please note that it is only for ‘core business activities’ that as a subsidiary and parent company can give or obtain loans. In this case Marketing for business activity is the core business on which the group has already spent t and is being reimbursed,” it further added.
Earlier this month, byju’s said that it has raised $250 million in a rights issue from its existing investors at a valuation of $22 billion.
byju’s Earlier this month it said it would lay off 2,500 employees by March 2023 in an effort to turn a profit. The layoffs will be 5% of Byju’s total workforce which is approximately 50,000 employees.
Byju’s net loss widens 4588.75 crore from a comprehensive loss for the financial year ending March 31, 2021 It spent Rs 231.69 crore for the financial year ended March 31, 2020.
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