Representative image. (Source: ShutterStock)
Byju’s has about eight days left to pay Blackstone nearly Rs 2,000 crore for its $950 million Aakash Educational Services deal, according to the company’s official financial report accessed by Moneycontrol.
“As per the terms of the agreement for acquisition of Aakash Educational Services, consideration to the extent of Rs.1,983 crore was due to be paid by the company to the sellers in June, 2022. This has been deferred to September 23, 2022,” the report read.
If Byju’s fails to complete the payment by September 23, the company will have to seek an extension from the Reserve Bank of India (RBI) for closing the transaction, according to lawyers Moneycontrol spoke with.
“As per the RBI guidelines, in case of a transfer of equity instruments between a non-resident (Blackstone) and resident (Byju’s), the consideration can be paid by the buyer on a deferred basis within a period of 18 months from the date of transfer agreement,” said a lawyer requesting anonymity.
“Looking at the figures, Byju’s seems to have paid more than 75 percent of the amount to Blackstone’s sellers. Now, the company (Byju’s) will have to pay the balance before September 23 (which seems as the end of 18 months window) or else it will have to seek an extension from the RBI to make the payment,” the lawyer added.
Emails sent to Byju’s, Aakash and Blackstone didn’t elicit an immediate response.
Blackstone holds about 38 percent stake in Aakash Educational Services. Byju’s has paid a large chunk to Aakash’s shareholders already.
In April 2021, Byju’s announced buying Aakash Educational Servcies for nearly $950 million in a cash and stock deal. Aakash’s promoters and Blackstone were to sell their stake to Byju’s and on the closure of the deal, Blackstone and Aakash Educational Services’ founders were to hold a minority stake in Byju’s.
Blackstone already is an investor in Byju’s and according to data available on Tracxn, the private equity firm owns about 0.2 percent stake in Byju’s. Once the transaction is complete, Blackstone would get about one percent more in Byju’s while promoters of Aakash Educational Services, the Chaudhry family, would get about 2 percent stake in the company, according to a person in the know. VCCircle had first reported this in July.
According to the document, the National Company Law Tribunal (NCLT) is yet to approve the amalgamation of Byju’s and Aakash Educational Services.
In June, news portal The Morning Context had reported that payments to sellers of Aakash Educational Services were delayed. Later, a spokesperson for Byju’s had said that the deal was on track and payments to Aakash Educational Services’ shareholders will be made by August. The spokesperson had also said that payments to Aakash Educational Services’ promoters were cleared.
In an interview with Moneycontrol on September 14, Byju Raveendran, co-founder and chief executive officer of Byju’s, said that the payment to Blackstone is something that is agreed upon between the two of us based on regulatory guidelines. “It’s a joke when people say that we are running out of cash,” Raveendran said.
Blackstone had bought 37.5 percent stake in Aakash Educational Services in 2019, valuing the offline education giant at about $500 million. With Byju’s buying out the firm at $950 million, Blackstone is set to make nearly two times on its investment in Aakash.