Byju's lenders seek 30% stake in settlement, sources say

• The settlement values Aakash Educational Services at roughly $2 billion; Aakash operates over 300 test preparation centers across India with annual revenue of approximately $254 million
• Byju's acquired Aakash for $1 billion in 2021, but its stake has since been diluted to a minority position, with Manipal Health now the largest shareholder
• The legal dispute spans courts in India, Delaware, and the United States, with U.S.-based Glas Trust having accused Raveendran of mismanagement after Byju's bankruptcy filing

Byju's Lenders Seek 30% Stake in Settlement Deal

Byju's global lenders are in advanced talks to acquire approximately 30% of Aakash Educational Services, a partly-owned education firm, in exchange for dropping all legal action against founder Byju Raveendran, according to sources familiar with the negotiations.

Background:

Once India's most prominent startup, Byju's expanded to over 21 countries during the COVID-19 pandemic by offering online courses. However, the company's fortunes collapsed in early 2023 when disputes with U.S.-based lenders emerged, culminating in a 2024 bankruptcy filing in India.

Key Dispute Details:

U.S.-based Glas Trust, representing a group of lenders, accused Raveendran of mismanagement and demanded $1 billion in unpaid loans. The legal battles have spanned courts across India and the United States. Both Raveendran and Byju's have denied wrongdoing.

Settlement Terms:

• Lenders will receive roughly 30% stake in Aakash Educational Services
• All allegations against Raveendran will be dropped
• All legal matters will be terminated
• Settlement talks value Aakash at approximately $2 billion

About Aakash:

Byju's acquired Aakash in 2021 for $1 billion, though its stake has since been diluted to minority status, with Manipal Health now the largest shareholder. Aakash operates over 300 centers across India, employs more than 5,000 faculty experts, and generates annual revenue of around $254 million, offering test preparation services for medical and engineering entrance exams.

The settlement negotiations involve Raveendran, Glas Trust, Aakash, and Manipal Health, marking a potential resolution to the high-profile dispute that contributed to Byju's dramatic downfall.