By Anto Antony
Aakash Educational Services Ltd., the tutoring business unit of edtech firm Byju’s, is reconstituting its board under an agreement with creditor Davidson Kempner Capital Management LP after certain loan covenants were breached, according to people familiar with the matter.
The new board of Aakash may have three nominees from Byju’s and two independent directors recommended by Davidson Kempner, the people said, asking not to be named as the information isn’t public. A spokesperson for Byju’s confirmed the board rejig.
Davidson Kempner, which manages more than $38 billion, forced the changes in Aaksah’s board as the borrower was in breach of some covenants on a $250 million loan, the people said. The fund had transferred less than half of the promised amount and is reviewing the lending decision, Bloomberg News reported earlier.
Byju Raveendran, the founder of the company, is in conversation with Davidson to repay or immediately cure the covenant breach under a forbearance period, which is in place till the last week of August, they said. Spokespersons for Byju’s and Davidson Kempner declined to comment on the talks.
The Economic Times reported earlier today on the reconstitution of the board.
Byju’s, once touted as the world’s most valuable edtech firm, has also missed a Aug. 3 deadline set by its creditors to restructure another $1.2 billion loan, adding fresh challenges to the borrower’s efforts to resolve disputes around the debt.