Edtech major Byju’s rights issue gets a $300 million commitment: report | Business News – Business Standard

Edtech giant Think and Learn, which operates under the brand name BYJU, has reportedly received a commitment of $300 million from investors for the ongoing rights issue that will be completed by the end of February, sources aware of the development said.

BYJU’S launched a rights offering in January to raise $200 million through a rights issue at an enterprise valuation of between $220 million and $250 million, down 99 percent from its peak valuation of $22 billion.

Sources also shared that BYJU’S has offered to eager investors to appoint two independent directors to increase transparency, but only after the rights issue and the announcement of the financial result for the 2023 financial year.

“BYJU’S has received a total commitment of approximately US$300 million for the rights as of date. Some investors have also proposed increasing the size of the rights issue, but the priority for the company is to successfully complete the existing issue,” said a source.

The source said negotiations are also underway with miffed investors over their participation in the rights issue.

“BYJU’S is also in talks with angry investors. The company expects them to invest as well, otherwise their shareholding will decrease by almost 50 percent,” the source said.

Another source said BYJU’S has offered to appoint two independent directors to the board to increase transparency, but the appointment can only take place after the results for the 2023 financial year are announced.

“BYJU’S expects to complete its financial results for the 2023 financial year in this quarter, which will bring the company into full compliance. Afterwards, the company will seek to appoint two independent directors to the board of directors. The proposal is part of a ongoing discussion with inclined investors who have called for an EGM (extraordinary general meeting) on ​​February 23,” the source said.

According to a source, the EGM announcement is supported by General Atlantic, Peak

The investors led by Dutch investment firm Prosus in the EGM announcement requested the resolution of the outstanding governance, financial mismanagement and compliance issues and the reconstruction of the Board of Directors.

According to the announcement, a consortium of BYJU shareholders had requested the board of directors for the meeting in July and December, but it was ignored.

BYJU’S investors have no voting rights on the CEO or management change according to the shareholders agreement.

Meanwhile, a representative of one of the investors, who called for the EGM, said they expect more investors to join the upcoming EGM on February 23, after which they will approach the National Company Law Tribunal for reconstruction of BYJU’s board .

A question in this regard to BYJU’S did not elicit an immediate response.

First print: February 18, 2024 | 11:59 PM IST