Manipal Education Group chief Ranjan Pai may invest $250-300 million in Byju's subsidiary Aakash Institute: Report

The chairman of Manipal Education and Medical Group, Ranjan Pai may invest about $250-300 million in Byju's-owned Aakash Institute, a media report said. According to sources in the know, Pai had initially planned to invest around $70 million, however, he is now close to infusing  $170 million in the first stage with more to come later, The Economic Times reported.

This amount may be used to clear Byju's outstanding debt to US-based investment firm Davidson Kempner Capital Management, the sources added.

The edtech firm, in May, had signed a Rs 2,000 crore (around $250 million) structured credit deal with Davidson Kempner against Aakash’s cash flow. It only got Rs 800 crore ($96 million) when an alleged covenant breach was triggered by the lender. Both the parties then began talks to settle the discussion.

As per “the final framework… Byju’s would have to repay Rs 800 crore of the loan and about Rs 600 crore in interest,” a person aware of the matter told ET.

Separately, Byju's has set a target to reach break-even by March 2024. The company is also planning to hive off Epic, its US-based children's book reading app, as part of its cost-cutting measures.

The firm plans to achieve this ambitious goal through enterprise-wide consolidation and organizational restructuring. Its strategic blueprint also includes the settlement of an outstanding $1.2 billion loan, news agency PTI reported.

This comes after the company has decided to lower its employee count by 3,000 to 3,500. The decision is designed to streamline operations and eliminate redundancy by ending the duplication of roles across various departments of the organisation.

"Think and Learn Private Ltd (TLPL) restructuring will see the current operations spread across several business units streamlined into four core areas of K-12, test prep, online and hybrid. The business restructuring, aimed at matching resources with cash flows, will see the company achieve break-even by coming March, in fourth quarter of current fiscal," PTI quoted a source as saying.

Byju's had previously stated that it hoped to become profitable by March 2023. Byju's reported a loss of Rs 4,588 crore for the fiscal year ending March 31, 2021, which was 19 times greater than the previous fiscal.

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