Kopar Khairane

Amid a decline in value, BYJU’S obtains a USD 300 million investment

<p>According to sources familiar of the situation, Edtech leader Think and Learn, which uses the BYJU’S brand, has reportedly obtained a commitment of USD 300 million from investors for its current rights issue, which is scheduled to conclude by the end of February.</p>
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<p>In January, BYJU’S announced a rights issue with the goal of raising $200 million at an enterprise value between $220 and $250 million, representing a 99% decrease from the company’s peak valuation of $22 billion.</p>
<p>According to sources, BYJU’S has also made an offer to aggrieved investors to choose two independent directors in order to improve transparency, but only after disclosing its financial results for the fiscal year 2023 and resolving the rights problem.</p>
<p>As of right now, BYJU’S has committed a total of almost USD 300 million for the rights. Although some investors have also proposed raising the amount of the rights offering, the company’s first objective is to properly resolve the current situation, according to a source.</p>
<p>According to the source, negotiations are still ongoing with irate investors about their involvement in the rights problem.</p>
<p>“BYJU’S is conversing with displeased investors as well. According to the source, “The company anticipates that they will invest as well, or else their shareholding will decrease by nearly 50%.”</p>
<p>According to a different source, BYJU’S has promised to add two independent directors to the board in order to increase transparency, but the appointment cannot take place until the financial year 2023 results have been announced.</p>
<p>“BYJU’S anticipates closing the FY 2023 financial result this quarter, which will fully comply with regulatory requirements. Following that, the business will try to add two independent directors to its board of directors. According to the source, the suggestion is a part of the continuing discussions with irate investors who have demanded an EGM (Extraordinary General Meeting) for February 23.</p>
<p>A source claims that General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands—who together own around thirty percent of BYJU’S—have supported the EGM notice.</p>
<p>In the EGM notification, the investors—led by the Dutch investment group Prosus—asked for the reorganization of the board of directors as well as the resolution of the unresolved governance, financial mismanagement, and compliance concerns.</p>
<p>According to the notification, a group of BYJU’S shareholders had asked the board of directors to call a meeting in July and December, but their requests had been turned down.</p>
<p>According to the shareholder’s agreement, BYJU’S investors are not entitled to vote on changes to the CEO or management.</p>
<p>A representative of one of the investors who requested an EGM, however, said that they anticipate other investors joining them at the next EGM on February 23. Following that, they plan to file a request for a reconstitution of BYJU’s board with the National Company Law Tribunal.</p>
<p>In this respect, BYJU’S did not respond right away to an inquiry.</p>