Latest News | Byju Reaches out to Miffed Investors to Participate in Rights Issue: Sources
Get latest articles and stories on Latest News at LatestLY. Edtech major Think and Learn, which owns Byju's brand, has reached out to miffed investors to set aside differences and participate in the company's fundraising process to prevent dilution of their present shareholding, according to sources.
New Delhi, Mar 29 (PTI) Edtech major Think and Learn, which owns Byju's brand, has reached out to miffed investors to set aside differences and participate in the company's fundraising process to prevent dilution of their present shareholding, according to sources.
Byju's founder and CEO Byju Raveendran, in a letter to investors, claimed that the company is already halfway through the postal ballot voting on a resolution to increase authorised share capital but would like to continue to show its good faith and like them to be part of its turnaround story.
"I am aware that some of our valued existing shareholders were unable to participate earlier in the rights issue. In good faith, the board is considering making an offer of renounced shares to existing shareholders to ensure that there is no more dilution to their shareholding. We will share more details with you shortly," Raveendran said in a letter sent on Friday.
The company closed the USD 200 million rights issue in February at a 99 per cent lower valuation compared to its peak enterprise value of USD 22 billion.
According to sources, Byju's may give time till April 4 to miffed investors to participate in the rights issue.
Byju's held the EGM (extra-ordinary general meeting) to increase the authorised share capital of the company to complete the process of raising USD 200 million through a rights issue.
The company raised USD 200 million to meet its operational requirements especially expenses related to employee salaries.
A group of four investors -- Prosus, General Atlantic, Sofina, and Peak XV -- along with support from other shareholders, including Tiger and Owl Ventures, have approached the National Company Law Tribunal (NCLT) against Byju's EGM and the rights issue.
Six investors jointly hold a 32 per cent stake in the company.
Byju claimed to have received a 50 per cent vote through a postal ballot in favour of the company's EGM resolution.
"I am happy to inform you that, in response to the postal ballot which was announced on 7 March, we already got more than 50 per cent votes to the increase in authorised share capital. I have always built BYJU'S with a spirit of equality and equity, and it has never been my intention to leave any investor behind, regardless of their shareholding size," Raveendran said.
He claimed to have received significant interest from third parties, but existing shareholders remain the company's priority.
"Despite the animosity shown by some of the investors in pursuing uncalled-for legal actions, we continue to show good faith towards all our shareholders and would like all of you to be part of our turnaround story," Raveendran said.
According to Byju's sources, none of the miffed investors, who proposed to oust Byju's founder and family from the management seat, took part in the EGM called by the company.
However, sources from the investors' side said that their authorised representatives participated in the meeting, and the voting option on the resolution is open through postal ballot till April 6, after which the final result will be known.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)