Some BYJU investors have asked for an EGM on February 23 to tackle problems such as unresolved governance and financial mismanagement.
Think & Learn (TLPL), which owns the online education startup BYJU’s, has obtained a $300 million commitment from investors for their $200 million rights offering.
The rights issue, which was announced in January 2024, will finish by the end of February. The business hopes to announce its FY23 results soon and may hire two independent board directors.
A group of BYJU investors has also asked for an extraordinary general meeting (EGM) on February 23. The agenda for the EGM includes problems such as unresolved governance, financial mismanagement, and board reorganization. These shareholders are also apparently demanding the removal of BYJU co-founder Byju Raveendran, despite the company’s claim that they have no such power.
The shareholder agreement does not allow them to vote on CEO or management changes.TLPL will proceed with the proposed $200 million rights sale after getting positive feedback from a number of investors. The firm is pleased with the support received from a wide range of its stockholders,” the company stated previously.
BYJU’s three board members, Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran, own around 26% of the firm, whereas the dissatisfied shareholders who called for an EGM possess 25%.
On January 29, 2024, India’s leading ed-tech company announced a $200 million fundraising campaign through a rights issue. BYJU had said that all of its equity stockholders might participate in it.
According to BYJU, the rights offer was intended to support capital expenditure and general corporate purposes, as well as to pay off urgent liabilities and satisfy operating needs. foreign lenders of BYJU recently filed an insolvency petition against the business with the National Business Law Tribunal (NCLT) in Bengaluru last month. They had extended more than 85% of BYJU’s total $1.2 billion Term B loan.
Over the last two years, the local ed-tech business has faced issues on several fronts, including crash crises, large layoffs, and breaches of FEMA (Foreign Exchange Management Act) regulations. BJYU has issued a warning regarding its capacity to “continue as a going concern” in the face of rising losses and legal challenges.
Byju Raveendran wrote an impassioned letter to BYJU staff earlier this month, stating that he had been moving mountains for months to meet the payment.
In the latest audited FY22 financials filed with the Finance Ministry’s Registrar of Companies (RoC), the company led by Byju Raveendran reported a significant increase in losses worth ₹8,245 crore. The losses were primarily driven by mounting losses in its two units, White Hat Jr. and OSMO.
Source: FortuneIndia
