Indian tycoon Ranjan Pai has taken over a $100 million convertible loan given by US hedge fund Davidson Kempner Capital Management to troubled education provider Byju's, according to people familiar with the matter.
Pai's family office, which focuses on healthcare and education, is now in talks with Byju's to invest money into its tutoring unit, Aakash Educational Services Ltd., the people said, asking not to be named as the information isn't public. Pai will get the right to nominate two members to Aakash's board as part of the transaction, they said.
Bringing in Pai to take over the loan is part of Byju's plan to turn around its struggling business. Davidson Kempner, which manages more than $37 billion, had only given out less than half of the $250 million of convertible debt it had offered the Indian startup as some loan agreement covenants weren't met, Bloomberg reported in June.
Representatives for Pai and Davidson Kempner didn't respond to requests for comment. A spokesperson for Byju's declined to comment.
Pai's investment comes after Byju's earlier this month published its first results in years, which showed losses at its parent company narrowed marginally amid a pandemic-era boom in business. Byju's is also in talks to sell its US-based kids' digital reading platform as it seeks funds to ease its financial pressures.
The standoff with the US fund and other creditors had cast a spotlight on founder Byju Raveendran, whose meteoric rise from tutor to head of the country's most valuable tech startup wowed investors.