New Delhi | PTI | Think and Learn Pvt Ltd, the education technology incipiency known by its brand name BYJU’S, has reportedly transferred a legal notice to the authors of Aakash Educational Services following contended resistance from them to complete a share exchange that was preliminarily agreed upon as part of the trade of Aakash Educational Services Ltd (AESL).
In 2021, BYJU’S acquired the 33- time-old slipup- and- mortar coaching center AESL for nearly USD 940 million in a cash and stock deal. After the accession, TLPL( Think and Learn Pvt Ltd) held 43 percent of the company, while its author Byju Raveendran held another 27 percent. Author Chaudhry’s family maintained about 18 percent in AESL, and Blackstone possessed the remaining 12 percent.
The original deal involved AESL merging with TLPL, as it was considered more tax-efficient for the seller, the Chaudhry family. However, due to delays in the proposed merger by the National Company Law Tribunal (NCLT), TLPL has invoked the unconditional fallback agreement and issued a notice to the Chaudhry family, requesting the execution of the swap deal.
According to sources, the minority shareholders have declined to swap their equity holding in AESL with TLPL, as per the original agreement. Approximately 70 percent of the 2021 acquisition was made in cash, while the rest was meant to be adjusted against TLPL’s equity.
Sources have revealed that both Blackstone and the Chaudhry family have recently written to BYJU’S, stating their refusal to comply with the TLPL notice sent in March regarding the share swap.
The completion of the share swap obligation would result in the Chaudhry family’s stake in TLPL being slightly below one percent. However, they are reportedly considering a cash payout instead of the share swap, which could potentially lead to demands from tax authorities, including on GST (Goods and Services Tax).
BYJU’S has not commented on the situation, and AESL has yet to respond to queries regarding the matter.
Sources emphasize that the share swap was an essential part of the acquisition agreement, with the intention of achieving enhanced tax efficiency for the seller, the Chaudhry family, through a merger of AESL with TLPL.
Meanwhile, education firm Aakash, post-acquisition by BYJU’s, is expecting to close the financial year 2023 with Rs 3,000 crore in revenue, marking a three-fold growth since the acquisition.