Top investors in BYJU’S parent company, Think and Learn Pvt Ltd, are considering skipping the edtech major’s $200 Mn rights issue, which concludes on Wednesday (February 28). Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA have filed a petition with the National Company Law Tribunal against the rights issue, alleging oppression and mismanagement of the company. These investors collectively hold about a 25% stake in BYJU’S.
Legal Battle and Board Changes
The NCLT bench reserved its judgment on the petition, allowing BYJU’S to proceed with its rights issue. BYJU’S investors have also called for an Extraordinary General Meeting (EGM) to change the company’s leadership and board.
Currently, BYJU’S board comprises Byju Raveendran and his family members, Divya Gokulnath and Riju Raveendran. Last year, three board members, including Russell Dreisenstock of Prosus, Vivian Wu from Chan Zuckerberg Initiative, and GV Ravishankar from Peak XV Partners, resigned.
Financial Challenges and Strategic Raise
In a letter to shareholders, CEO Byju Raveendran stated that the $200 Mn raise would provide the company with capital to address current liabilities and ensure growth capital for future endeavors.
BYJU’S filed its financial statements for FY22 almost 22 months after the end of the year. Despite an 81% surge in consolidated net losses to INR 8,245.2 Cr, operating revenue rose over 120% year-on-year to INR 5,014.6 Cr during the year, primarily driven by Aakash's improved financial performance.
Legal Proceedings and Temporary Relief
Amidst the ongoing legal battles, BYJU’S moved the Karnataka High Court against its investors' decision to hold an EGM. In an interim order, the court stated that any decisions taken at the EGM would not come into effect until the next hearing on March 13.
These developments underscore the challenges faced by BYJU’S as it navigates through legal disputes and strives to maintain its market position and operational stability.
