Ahead of high-voltage EGM, Byju's rights issue to raise $200 million gets fully subscribed

Ahead of high-voltage EGM, Byju’s rights issue to raise $200 million gets fully subscribed

Edtech firm Byju’s rights issue for $200 million at a valuation cut of 99% has been fully subscribed ahead of crucial EGM meeting on Friday.

Byju Raveendran will reportedly put $45-$46 million in the rights issue to preserve his shareholding in the company, which may also see some late stage investors coming in.

Byju’s largest investors have called for an extraordinary general meeting this Friday, demanding to oust the company’s leadership and rejig its Board.

The notice sent by the investors listed has alleged financial mismanagement, erosion of value due to management’s failure to enforce the company’s legal rights and concealment of material information.

“The request for an EGM is supported by a consortium of Think & Learn (T&L) shareholders and follows earlier notices of requisition sent to the T&L board of directors in July and December 2023, which were disregarded…”

“The resolutions being put forward for the EGM to consider include a request for the resolution of governance, financial mismanagement and compliance issues; the reconstitution of the board of directors, so that it is no longer controlled by the founders of T&L; and a change in leadership of the company,” the investor group had said.

A Moneycontrol report says these shareholders would be able to participate in the issue till February 29 or stand to have their stakes diluted massively.

“Our rights issue is fully subscribed and my gratitude to my shareholders remains strong. But my benchmark of success is the participation of all shareholders in the rights issue. We have built this Company together and I want us all to participate in this renewed mission. Your initial investment laid the foundation for our journey and this rights issue will help preserve and build greater value for all shareholders,” founder and CEO Byju Raveendran told investors in a letter.

“I understand that participating in this rights issue may seem like a Hobson’s choice. However, this is the only viable option in front of us today to prevent permanent value erosion. I’m reminded of the words of Abraham Lincoln – “A house divided against itself cannot stand.” We must stand together and act in the best interest of the Company,” he added.

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