Ranjan Pai turned saviour for Aakash; so why are investors upset?

livemint.com:

₹4,500-4,800 crore (around $600 million). This is far lower than the price Byju’s paid in 2021 when it acquired Aakash for around $950 million. Many others, including those participating in Think & Learn’s upcoming rights issue, have also expressed concern at the lowered valuation of Aakash, the people cited above said.

The ongoing conversion proposal takes Pai’s stake in Aakash Education Services to 38.6-39.6%, while that of parent entity Think & Learn falls to 27% from 43%. Blackstone and Aakash Education Services founder Aakash Chaudhry will see their cumulative stake reduced to 18% from 30%. Byju’s founder Byju Raveendran will see his personal stake in Aakash fall to around 16% from 27%.

The issue at hand dates back to May 2022, when Raveendran raised debt capital against a part of his shares in Aakash at onerous terms from global lending firm Davidson Kempner. Fearing a loss of control over the test prep subsidiary, Raveendran brought in Pai to acquire the debt held by Davidson Kempner. At that point, Kempner had reconstituted the Aakash board.

The objections of some dissenting shareholders are of “no consequence," one of the people cited above said, as the conversion was approved with no dissension by the board where Think & Learn had four votes, and Pai had two votes (which were previously held by Davidson Kempner). Prosus, Blackstone, Chaudhry, Think & Learn and Pai did not respond to requests for comment. “The shareholders of Aakash already approved the conversion of debt to equity when it was held by Davidson Kempner," the second person cited above said, arguing that Pai only stepped into the shoes of Davidson Kempner.