In a dynamic move to address its financial challenges, leading edtech company BYJU’S is exploring the possibility of divesting a portion of its stake in Aakash Educational Services, coupled with renewed negotiations with lenders to restructure its substantial $1.2 billion term loan. The strategic decisions come amidst a series of recent developments that have thrust BYJU’S into the spotlight, ranging from internal reorganization to regulatory scrutiny and valuation adjustments.

Sources indicate that BYJU’S holding company, Think and Learn, aims to dilute up to 20% of its current 70% equity stake in Aakash Education. While preliminary talks with potential investors are underway, the extent of the proposed stake sale remains subject to finalization. Notably, BYJU’S had previously acquired Aakash Education for $950 million in 2021, with initial plans to pursue an IPO by mid-2024.

Simultaneously, as part of its efforts to navigate the challenging financial landscape, BYJU’S has reopened negotiations with its lenders, seeking to avert any escalation of legal disputes. According to sources familiar with the matter, the lenders have submitted a comprehensive amendment proposal outlining debt reduction measures, enhanced coupon provisions, and strengthened investor safeguards. A timely response from BYJU’S is anticipated in the coming week, showcasing the company’s commitment to addressing its financial obligations.

This latest development arises from a protracted conflict between BYJU’S and its lenders, which has been ongoing for several months, characterized by unsuccessful attempts to revamp the existing loan agreement. In a pivotal juncture, BYJU’S opted to forego an interest payment on its term loan in June, further exacerbating tensions with the lending institutions and intensifying its financial predicament.

Meanwhile, BYJU’S is actively engaged in advanced discussions with prospective new shareholders for a substantial $1 billion fundraising round. These initiatives signify BYJU’S determination to secure strategic partnerships and bolster its financial footing, providing renewed optimism for the future.

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