Byju’s, in the middle of the intense financial crisis and pressure from lenders, got a commitment of $300 million from its investors for the upcoming rights issue, which has slashed the valuation of parent company Think and Learn by over 90 per cent from its peak.
Investors have made a commitment of $300 million ( ₹2500 crore) for Byju’s rights issue, which is set to close by the end of February 2024.
Byju’s floated a rights issue in January to raise $200 million through equity rights issue at an enterprise valuation in the range of $220-250 million which is a 99 per cent reduction in its peak valuation of $22 billion, which was achieved in March 2022 during the Covid pandemic.
ALSO READ| When Google offered 300% hike to retain employee who wanted to work at…
Apart from its rights issue to ease pressure from the lenders, Byju’s has also offered its disgruntled investors the option to appoint two independent directors to enhance transparency within the company. The independent directors can only be appointed after the rights issue is complete and the 2023 financial results are declared.
“Byju’s has received a total commitment of around USD 300 million for the rights as on date. Some investors have also suggested increasing the rights issue size but the priority for the company is to close the existing issue successfully,” said a source.
The source said that negotiation is also on with miffed investors for their participation in the rights issue. “Byju’s is in discussion with miffed investors also. The company expects that they will also invest, otherwise their shareholding will reduce by almost 50 per cent,” the source said.
Investors seek ouster of CEO Raveendran
A group of investors have called a special EGM to conduct a vote for the ouster of the founders of Byju’s amid reports of mismanagement and withholding information from the shareholders. According to a source, the EGM notice has been backed by General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, who jointly account for around 30 percent stake in the company.
The shareholders will be conducting a vote to seek the removal of the founders – Byju Raveendran, his wife Divya Gokulnath and brother Riju Raveendran – from the Byju’s board and appointing new members for top posts.
This sentiment of the investors had caused an uproar within the company earlier, but had been supressed by majority shareholders. Notably, the Raveendran family holds 26 percent stake in Byju’s.
(With inputs from PTI)