Byju Raveendran, founder and CEO of edtech company Byju, which is embroiled in a dispute with shareholders, has made another attempt to placate the angry shareholders. Byju Ravindran has written a letter to the shareholders requesting them to participate in the rights issue of the company. Byju is currently struggling with cash crunch. It could not even pay salaries to its employees last month. Also, due to cost cutting, it had closed all its offices except its Bengaluru headquarters. Apart from this, the company had also closed some of its tuition centres.
Byju’s management is in controversies
There is a dispute going on regarding the management of Byju’s between Byju Ravindran and some of the company’s big shareholders Peak XV Partners, General Atlantic and Chan Zuckerberg’s Porus. In this letter sent through email, Byju Ravindran has said that we do not want to leave any investor behind. Some of our important shareholders could not participate in the first rights issue. The company’s board wants that their shareholding should not be reduced through the rights issue of $200 million. For this we have received more than 50 percent votes. He said that some investors have opposed us through unnecessary legal action. Many third parties have shown interest in this rights issue. But, we want to give the first opportunity to our existing investors only. We want all investors to be a part of our comeback journey.
Rights issue was released in January
Byju had issued a rights issue in January this year to raise $200 million. The valuation of the company has been reduced by almost 99 percent for this rights issue. Byju had once achieved a market value of $22 billion. This rights issue was fully subscribed. A day earlier, the National Company Law Tribunal (NCLT) had rejected the petition filed by investors on March 28 to ban the general meeting. Earlier, Karnataka High Court had extended the stay on the EGM decision to remove Byju Ravindran from the post of CEO. Byju’s loss has increased to Rs 8,553 crore in financial year 2023. This figure was Rs 8,240 crore in financial year 2022.
