BYJU'S gets lifeline with $300M pledge ahead of rights issue
Edtech giant Think and Learn, which operates under the BYJU'S brand, has secured a $300 million commitment from investors for its ongoing rights issue, as per PTI. The rights issue, which aims to raise $200 million through equity rights at an enterprise valuation between $220-250 million, is set to close by the end of February. The new valuation marks a significant drop of 99% from BYJU'S peak valuation of $22 billion.
Shareholders likely to oust BYJU'S board at EGM
An extraordinary general meeting (EGM) is planned for February 22, where shareholders are anticipated to vote out the current board led by founder Byju Raveendran. To remove the three-member board, which includes Raveendran, his wife Divya Gokulnath, and his brother Riju Ravindran, a majority vote is required. Investors led by Dutch investment firm Prosus requested the EGM notice to address governance, financial mismanagement, and compliance issues and restructure the Board of Directors.
Negotiations with miffed investors ongoing
BYJU'S is currently in talks with unhappy investors about their participation in the rights issue. It is reported that the company expects that them to invest, or else their shareholding will reduce by almost 50%. To improve transparency, the edtech company has proposed appointing two independent directors after the rights issue and the announcement of its financial results for the 2023 fiscal year. However, this appointment can only occur after the 2023 financial results are declared.
EGM backed by major investors
The EGM notice has received support from General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, who collectively hold around 30% stake in BYJU'S. A representative from one of the investors pushing for the EGM expects more investors to join them at the February 23 meeting. Following this meeting, they plan to approach the National Company Law Tribunal (NCLT) for the reconstitution of BYJU'S board.
