SUMMARY
BYJU’S said that 55% of the shareholders voted in favour of increasing the share capital during the postal ballot and its EGM
The approval of the EGM proposals paves the way for BYJU’S parent Think & Learn to issue fresh shares and conclude the rights issue aimed at tackling the liquidity crunch
Earlier, the startup said that its $200 Mn rights issue, at a valuation cut of 99%, was fully subscribed
Over a month after it closed its $200 Mn rights issue, troubled edtech major BYJU’S said that a majority of its shareholders voted in favour of increasing the company’s authorised share capital.
In a statement, the edtech giant said that 55% of the shareholders voted in favour of increasing the share capital during the postal ballot which concluded on April 6 and extraordinary general meeting (EGM) held on March 29.
“The approval of the EGM proposals paves the way for Think & Learn Private Limited, the parent company of BYJU’S, to issue fresh shares and conclude the rights issue aimed at tackling the liquidity crunch, including unpaid salaries, regulatory dues and vendor payments,” the startup said.
It is pertinent to note that BYJU’S is at war with some of its investors, including those disgruntled with the $200 Mn rights issue.
In the statement, BYJU’S once again put the blame for delays in vendor payments and disbursement of employee salaries to the “irrational hostility from four foreign shareholders who chose frivolous litigation over constructive discussion”.
Meanwhile, founder and CEO Byju Raveendran said on the development, “We are grateful to our investors for their support and understanding during this pivotal phase. Their invaluable support in providing essential working capital underscores their collective commitment to our renewed growth push. The shareholder approval marks a significant threshold in our relentless push to turn around the business beset with multiple challenges, which we are resolving one by one, slowly but surely.”
After securing the shareholders’ nod, BYJU’S said it aims to get back on its feet stronger by launching a suite of AI-first products aimed at hyper-personalising education globally.
It is pertinent to note that BYJU’S initiated the rights issue to raise $200 Mn through equity rights in January. However, its investors Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA filed a petition with the National Company Law Tribunal (NCLT) in February against the issue and opted out of the rights issue completely.
The Bengaluru bench of the NCLT instructed the company to keep the proceeds from its rights issue in a separate escrow account.
BYJU’S has cited the investors’ decision to move the court as the key reason behind its failure to clear employee salaries on time.
Meanwhile, the disgruntled group of investors also accused BYJU’s of violating the Tribunal’s prior order by allotting shares to those who subscribed to its rights issue without increasing the company’s authorised capital on April 4.
The NCLT’s Bengaluru bench said it would be a “blatant violation” of its interim order dated February 27 if the company had done so. The fate of the $200 Mn is still on hold as the matter is due for a subsequent hearing on April 23.
BYJU’S has been fighting on multiple fronts over the last year or so. The edtech giant is plagued by a slew of problems, including rising losses, delay in filing financial statements. legal cases, liquidity crunch, layoffs, and insolvency petitions.
Earlier today, the edtech startup said BYJU’S India CEO Arjun Mohan is leaving the organisation, months after he joined the troubled company. BYJU’S also said it is consolidating its businesses into three focused divisions — the learning app, online classes & tuition centres, and test-prep.
