NEW DELHI (Diya TV) — Byju’s, the embattled edtech giant, has announced plans to offer renounced shares to shareholders who refrained from participating in its recent rights issue, aiming to mitigate further dilution of their holdings amidst ongoing legal disputes. This decision comes following the company’s successful procurement of over 50% of the required votes to expand its authorized share capital, facilitating a $200 million rights issue.
In a letter to shareholders, Byju’s founder and CEO, Byju Raveendran expressed goodwill towards all shareholders despite facing legal actions from some investors. By securing the majority vote, Byju’s now has the capacity to issue fresh shares, allowing it to proceed with the rights issue, albeit at a substantial discount from its previous peak valuation of $22 billion in 2022.
Raveendran emphasized the company’s interest in engaging with existing shareholders, affirming their pivotal role in Byju’s journey. Despite facing opposition from major investors like Prosus, Peak XV, and the Chan Zuckerberg Initiative, Byju’s remains resolved to navigate financial hurdles and sustain its operations.
The ongoing legal battle between Byju’s and its investors stems from disagreements surrounding a rights issue initiated in late January, which has been met with resistance from dissenting shareholders. The dispute has escalated to court intervention, with a hearing scheduled for April 4th to address the legality of the rights issue and related matters.
While Byju’s has managed to secure necessary votes for its capital expansion, challenges persist, including delays in salary disbursement attributed to interim court orders restricting fund usage. Despite these setbacks, Byju’s remains optimistic about overcoming obstacles, with plans to leverage alternate financing options to fulfill its salary commitments by April 8th.
In a message to employees, Byju’s management acknowledged the strain caused by financial uncertainties, but expressed confidence in the Indian judicial system to resolve the ongoing legal impasse.
