Shareholders force BYJU CEO Raveendran to Step Down from his position

Shareholders force BYJU CEO Raveendran to Step Down from his position

Several major stakeholders in Think and Learn Pvt. Ltd., the parent company of edtech startup Byju’s, have urged for a shift in the company's leadership. This includes the ousting of co-founder and CEO Byju Raveendran, as disclosed by individuals familiar with the situation. 

General Atlantic, Prosus Ventures, Peak XV, and Chan Zuckerberg Initiative, among others, jointly issued a notice on Thursday, requesting an extraordinary general meeting to propose a restructuring of the struggling company's board. 

The notice was sent after the company neglected to address an EGM requisition notice initially submitted in July and then again in December, according to an informed source. In a statement, the investor consortium emphasized that their EGM notice is in the best interest of the company and its shareholders. 

Byju's spokesperson has not promptly responded to a comment request. Byju’s, once India's most valuable startup with a peak valuation of approximately $22 billion in late 2021 amid the pandemic-driven surge in remote learning, has faced a downturn. 

The company is grappling with increased liabilities owed to vendors and employees as students return to in-person learning with the reopening of the economy. Investors assert that the EGM notice is the result of months of attempts to engage with the company’s management to address ongoing issues related to corporate governance, mismanagement, and compliance. 

The EGM notice follows a recent rights issue the company initiated to raise $200 million from existing shareholders, valuing the firm at a post-money valuation of $225-250 million. The funds are intended to address mounting liabilities, estimated at $125-$150 million, covering areas from employee provident fund to unpaid vendors. 

Investors not participating in the rights issue could witness substantial erosion of their shareholding, given the shares are offered at 0.1% of its peak valuation in its last funding round. For over a year, the company has grappled with various challenges and is currently in dispute with its $1.2 billion Term Loan B bondholders, who have sued the company citing technical default. 

This default relates to the company’s inability to file financial results for the period ending 31 March 2022, and its inability to present its subsidiary Whitehat Jr as a guarantor. A hearing is scheduled at the Bengaluru bench of the National Company Law Tribunal on 7 February. 

Byju's has been attempting to negotiate with its bondholders while simultaneously exploring options to raise funds by selling key assets such as US-based Epic and Singapore-headquartered Great Learning. 

After a delay of over 22 months, the company filed its consolidated financials for the period between April 2021 and March 2022 last month. The results revealed that losses surged to ₹8,245 crore from ₹4,564 crore in the previous year, while consolidated income increased to ₹5,298.43 crore in FY22, up from ₹2,428.39 crore a year ago.

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