Byju’s Offers $300 Million to Appease Disgruntled Investors

BYJU’S offers to appoint two independent directors to address investor concerns, contingent on completing rights issue and fiscal 2023 financial results.

Edtech giant Think and Learn, known by the brand name BYJU’S, has garnered a commitment of USD 300 million from investors for its current rights issue. This fundraising initiative is expected to conclude by the end of February.

BYJU’S initiated a rights issue in January with the aim of raising $200 million through an equity rights offering. The enterprise valuation for this rights issue is estimated to be in the range of $220-250 million. This valuation marks a significant decrease of 99% from its peak valuation of $22 billion.

BYJU’S offers to appoint two independent directors to improve transparency, contingent on completing the rights issue and disclosing financial results for the 2023 fiscal year.

According to a source citing a PTI report, BYJU’S has received a total commitment of approximately USD 300 million for its rights issue as of the present date. Some investors have proposed enlarging the size of the rights issue. However, the company’s current priority is to ensure the successful closure of the existing rights issue.

The source indicated that negotiations are underway with disgruntled investors regarding their potential participation in the rights issue. According to the source, BYJU’S is engaging with these investors, anticipating their investment to prevent a significant reduction in their shareholding, which could amount to almost 50% if they choose not to participate.

A consortium of BYJU’S shareholders had made requests to convene a meeting of the board of directors in both July and December. However, these requests were disregarded by the company. It’s notable that BYJU’S investors do not possess voting rights regarding CEO or management changes as outlined in the shareholder’s agreement.

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