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With Singapore Topco stepping back, a significant legal obstacle has been cleared for Aakash, which could now move forward with revising its AoA, securing additional funding, or implementing internal restructuring.
Previously, concerns had been raised that such amendments could disproportionately favour Manipal Education, the largest stakeholder in Aakash, while undermining the rights of minority stakeholders. Singapore Topco, which holds 6.97% stakes in Aakash, had objected to the changes on similar grounds.
Byju’s Strengthens Control Over Aakash
The withdrawal of the plea enhances Byju’s ability to proceed with the AoA modifications, a move that could aid in monestising Aakash amidst its ongoing financial difficulties. Byju’s is currently navigating a $1.2 billion debt crisis, and control over Aakash is crucial in managing its financial position.
In November 2024, Singapore Topco, along with US-based Glas Trust, had approached the National Company Law Tribunal (NCLT) to challenge the proposed AoA amendments. At the time, Singapore Topco had obtained a stay on the changes, fearing that Byju’s might leverage Aakash’s assets or cash flows to manage its own financial obligations.
The lenders also alleged that the amendments sought to diminish their influence over Aakash, thereby affecting Byju’s overall valuation.
Market analysts suggest that Singapore Topco’s decision to withdraw its plea may indicate a settlement or an alternative resolution mechanism being explored between the parties, However, no formal statement has been issued regarding the terms of this withdrawal.
Byju’s had acquired Aakash in 2021 for $940 million in a transaction structured with 70% cash and 30% equity. The deal involved the Chaudhry family, founders of Aakash, and Blackstone.
However, in 2023, the merger process faltered after the Chaudhry family declined to proceed with a share-swap arrangement, citing governance related apprehensions. Subsequently, in January 2024, Manipal Group acquired a 40% stake in Aakash, making it the largest shareholder.
The recent legal development adds another layer to the evolving dynamics of Byju’s and Aakash’s governance structure, with potential implications for both investors and stakeholders in the company’s future decisions.
