BYJU'S rights issue gets $300 million commitment, edtech major to hold an EGM on Feb 23
Summary
Edtech major Think and Learn, which operates under BYJUS brand name, is learnt to have received a commitment of $300 million from investors for its ongoing rights issue which will close by the end of February, sources aware of the development told news agency PTI.BYJUS floated a rights issue in January to raise $200 million through equity rights issue at an enterprise valuation in the range of $220-250 million which is a 99 percent reduction in its peak valuation of $22 billion.The edtech company is also scheduled to hold a extraordinary general meeting (EGM) on February 22. An EGM is a shareholder meeting called other than a companys scheduled annual general meeting (AGM).As per a report by Times of India, at the EGM, shareholders are likely to oust edtech startups board led by founder Byju Raveendran.To oust the three-member board comprising Raveendran, his wife Divya Gokulnath and his brother Riju Ravindran, majority of votes should be in favour of the resolution, the report further stated.The investors led by Dutch investment firm Prosus in the EGM notice requested the resolution of the outstanding governance, financial mismanagement and compliance issues and the reconstitution of the Board of Directors.As per the notice, a consortium of BYJUS shareholders had in July and December requested the board of directors for the meeting but it was disregarded.BYJUS investors have no voting rights on the CEO or management change as per the shareholders agreement.Also Read | Byjus asked by Karnataka labour department to settle dues of former employeesSources told PTI that BYJUS has offered miffed investors to appoint two independent directors to enhance transparency but only after the rights issue and declaring its financial result for the 2023 fiscal. The company expects that they will also invest, otherwise their shareholding will reduce by almost 50 per cent," the source added.Another source told PTI that BYJUS has offered to appoint two independent directors on the board to enhance transparency but the appointment can happen only after results for financial year 2023 are declared. "BYJUS expects to close the FY 2023 financial result in this quarter which will make the company completely compliant with the rules. The proposal is part of ongoing discussion with miffed investors who have called for EGM (Extraordinary General Meeting) on February 23," the source said.According to a source, the EGM notice has been backed by General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, who jointly account for around 30 per cent stake in BYJUS.Also Read | Byjus founder Byju Raveendran, investors responsible for edtech firms downturn, says UpGrads Ronnie ScrewvalaMeanwhile, a representative of one of the investors, who have called for EGM, said they expect more investors to join them in the upcoming February 23 EGM after which they will approach the National Company Law Tribunal for reconstitution of BYJUs board.A query sent to BYJUS by PTI in this regard elicited no immediate response.