In a significant development, private equity firm Blackstone-backed Singapore Topco has withdrawn its legal petition before the National Company Law Tribunal (NCLT) against Aakash Educational Services, a subsidiary of Byju's, over proposed changes to the the latter's Articles of Association (AoA).
With Blackstone now stepping back, it removes a key legal hurdle for Aakash, potentially allowing it to amend its AoA, raise capital or restructure internally, a move that was initially opposed by the lender.
The lender, which holds a 6.97 percent stake in Aakash Education, had opposed that the proposed amendment to the AoA alleging that it was aimed to enhance the rights of Manipal Education, which owns 40 percent of Aakash, while diluting the minority shareholders rights.
NCLT stays Aakash from amending its AoA, halting Byju's alleged attempt to dilute stake
Byju's gains ground
The latest development also paves the way for Byju’s to push through the AoA amendments to potentially monetise its most valuable subsidiary as it grapples with a $1.2 billion debt crisis.
Both Singapore Topco and US-based Glas Trust had filed separate petitions on the matter and the former had got NCLT's stay on the Aakash AoA amendment move in November 2024.
The lenders feared that Byju’s might use Aakash’s cash flows or assets to repay its own debts, further escalating tensions. They alleged that the move sought to strip minority shareholders of their rights and was seen as an attempt to reduce Byju’s control over its highly valuable asset.
They further stated that Aakash’s worth is central to Byju’s overall valuation, and any move to dilute their stake would be damaging.
The withdrawal of Blackstone's petition suggests that the Singapore Topco and Aakash may have reached an out-of-court settlement or are pursuing alternative dispute resolution mechanisms.
'Need urgent funds to survive': Aakash pleads with NCLT to lift stay amid investors dispute
Byju’s had acquired Aakash in 2021 for $940 million, offering 70% cash and 30% equity to its founders, the Chaudhry family, and Blackstone. However, the merger fell apart in 2023 after the Chaudhry family refused to complete a share-swap deal, citing governance concerns. In January 2024, the Manipal Group purchased a 40 percent stake in Aakash, becoming its largest shareholder.
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