Cash-strapped Byju’s senior management told employees that the company has secured commitments of over 100 per cent for its proposed rights issue to raise $200 million. The ed-tech firm wrote a note to employees a day after a group of investors issued a notice for an EGM seeking a change of management at Byju’s as its board cited ‘persisting issues’.
The management said there is a delay in salary for January and said it is because of the “artificially induced crisis by these select investors.”
“The success of the rights issue will ensure that we have sufficient operational capital to fund our short-term needs from March onwards. This (rights issue) process will take 25 more days to complete. It will ensure we have enough growth capital, and also to meet all operational liabilities. This will mark the beginning of the final phase of our recovery,” the management told employees in an email signed collectively.
The management was “pained to see” investors demanding a step-down of founder and CEO Byju Raveendran, the email said.
Meanwhile, a US unit of Byju’s filed for Chapter 11 bankruptcy proceedings in the US court of Delaware. The Alpha unit listed liabilities in the range of $1 billion to $10 billion while put its assets in the range of $500 million to $1 billion, Reuters reported citing Byju’s court filing.
The ed-tech company was valued at $22 billion in 2022, but has more recently seen lenders initiating bankruptcy proceedings. Some of its investors said that the company’s valuation had fallen to between $1 billion and $3 billion.