Companies
Founders look to buy Great Learning back
Summary
- The proposed buyback follows Byju’s efforts to monetize some of its assets to repay its lenders.
MUMBAI : The founders of Great Learning are trying to line up investors to buy back the online education provider from Byju’s, two people aware of the discussions said. The management buyback will allow the founders to continue to run the firm and receive equity payouts in return.
The proposed buyback follows Byju’s efforts to monetize some of its assets to repay its lenders. The edtech company is also in advanced talks to sell the US kids’ reading platform Epic, a deal that is likely to close first.
The founders of Singapore-based Great Learning—Mohan Lakhamraju, Hari Krishnan Nair and Arjun Nair—sold a controlling stake to Byju’s in 2021 for $600 million in cash and stock. The deal included several milestone payments as well.
“It is in the interest of the incoming investor that the founding team and the management continue. Various structures are being discussed. It will be speculative to say what the final contour would be," said one of the people cited above.
To be sure, there could be other offers that the seller will consider to maximize returns.
According to the second person, the founders could negotiate an additional equity stake post the buyback with an investor consortium.
“Talks are at an initial stage for Great Learning. A formal process is likely to be launched once the deal for Epic reaches a more definitive stage," the person said.
A spokesperson for Great Learning declined to comment. Byju’s did not respond to a request for comment.
Early last month, Byju’s put up kids’ reading platform Epic and higher education platform Great Learning for sale as the edtech giant tries to mend fences with its lenders by paying off a $1.2 billion loan it raised in November 2021.
The two assets may fetch Byju’s around $800 million to $1 billion, which will be used to advance the repayment of its outstanding term loan B (TLB), Mint reported.
The sale of assets also comes at a time when the company is grappling with the rising cost of debt and concerns over corporate governance.
Three of its non-promoter board members and its statutory auditor, Deloitte, resigned in June, citing the company’s failure to maintain governance standards as it grew in scale. At the centre of it was the delay in filing the financials for 2021-22.
Earlier this month, the company said it has convened a meeting in the second week of October with its board and some invitees for approval and adoption of accounts for FY22. It is likely to be ready with its 2022-23 financials by 31 December.
