Byju’s global lenders are in talks to take a roughly 30 per cent stake in one of its partly owned education firms and drop all legal action against the Indian company’s founder, Byju Raveendran, two sources with direct knowledge of the matter said.

Byju’s operated in more than 21 countries at one point and became popular during the Covid-19 pandemic by offering online courses. But its fortunes changed in early 2023 when a high-profile dispute with its US-based lenders began.

US-based Glas Trust, trustee for a group of lenders, accused Raveendran of mismanagement and demanded repayment of $1 billion in unpaid loans after Byju’s entered bankruptcy proceedings in India in 2024. Raveendran and Byju’s have denied any wrongdoing.

After a meteoric rise from teacher to startup billionaire, Raveendran’s education technology company collapsed. In 2024, he said: “The company is worth zero.”

The legal dispute, spanning courts in India, Singapore and the United States, has continued since Byju’s bankruptcy.

The two sources, who declined to be named because the talks are private, told Reuters that the lenders are in the advanced stages of settling the dispute and are likely to take a roughly 30 per cent stake in Aakash Educational Services, a leading offline coaching institute.

As part of the settlement, all parties would withdraw the cases filed against one another, the sources said.

Byju’s acquired Aakash in a $1 billion deal in 2021, but its stake has since been diluted to a minority holding, with Manipal Health now the single largest shareholder.

Raveendran declined to comment, citing pending legal proceedings. Byju’s, Glas Trust, Aakash Educational Services and Manipal Health did not respond to Reuters requests for comment.

Aakash operates more than 300 centres across India, offering test-preparation services for medical and engineering entrance examinations as well as school examinations. It has a faculty of more than 5,000 experts and last reported annual revenue of about $254 million.

The settlement talks, which one of the sources said involve Raveendran, Glas Trust, Aakash and Manipal Health, value Aakash at roughly $2 billion, the two sources added.