Edtech company Byju’s has put two of its key assets, Epic and Great Learning, on the block to generate $800 million-$1 billion in cash. The troubled company has proposed to clear a $1.2 billion Term loan B to its lenders, and the sale is part of its plans to meet this commitment, among others, people in the know said.
Byju’s has been working with bankers to sell the two assets to strategic investors and our sources told us it has garnered some interest. Simultaneously, to raise fresh equity capital, the people added.
Byju’s is expecting anywhere between $400-$500 million from the sale of Epic, a US-based kids’ learning company it had acquired in a $500 million cash-and-stock deal in July 2021 . Separately, higher education and upskilling firm Great Learning is on the block, and Byju’s expects around $500-$600 million for the company, the people aware of these discussions said.
“A proposal has been made to clear the whole TLB loan. There is about $500 million remaining from the TLB itself; the sale of assets would fetch additional capital by this month to clear the dues,” one of the people aware of the talks said. He added that Byju’s is simultaneously engaging with sovereign funds for a new fundraise.
A spokesperson for Byju’s did not immediately respond to ET’s query.
If the sales go through, they would give Byju’s some much needed ammunition to manage its financials, and also give it some elbow room during negotiations with the promoters of test preparation company Aakash Institute, as well as creditor-Davidson Kempner.
On September 2, ET had reported that Byju’s has formed a panel to appoint a new chief executive officer and chief financial officer for Aakash Institute, as incumbents Abhishek Maheshwari and Vipan Joshi are moving on.
Aakash, which Byju’s had acquired for $950 million in 2021, is in the midst of a shareholder tussle. Byju’s has been in talks with the promoters—the Chaudhry family and investment fund Blackstone—to complete the share swap for the deal announced two years ago. Sources told ET that the equity swap part of the Byju’s-Aakash deal is pending.
ET had reported on August 4 that Aakash’s board was being revamped even as talks were on with New York-based investment fund Davidson Kempner (DK) over the Rs 2,000-crore credit line it had extended to Byju’s this year.