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Byju’s salary update: March payouts begin as embattled edtech major arranges for alternative credit
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Byju’s salary update: The edtech major Byju’s, which is facing financial challenges, has started paying salaries for March and aims to complete the process by April 18. The management team informed employees that due to issues with accessing funds from a rights issue, they have arranged an alternative credit line to ensure timely payments.
According to an ET report, an email sent by the management team to employees reads, “Unfortunately, despite our efforts, we haven’t yet secured approval to access the rights issue funds, because of the action of four foreign investors.However, we have arranged an alternative line of credit to ensure timely payments.”
The delay in salaries was caused by conflicts with foreign investors, hindering fund utilization. It had been reported on April 1 that Byju’s has delayed salaries for employees yet again as it battles a severe cash crunch.
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Byju’s is currently dealing with legal matters involving investors opposing the rights issue and the potential removal of founder Byju Raveendran as CEO. The company sought arbitration to settle a dispute over a $200-million rights issue.
The Karnataka High Court has also further prolonged the temporary halt on the results of an Extraordinary General Meeting (EGM) arranged by investors to oust company founder Byju Raveendran from his position as chief executive back in February. Raveendran has also informed shareholders of his proposal to allow the estranged investors an opportunity to participate in the rights issue.
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The ongoing rights issue is being offered at a significant discount of 99% to the company’s peak valuation of $22 billion.
Investors not engaging in the funding may face a loss of their shareholding after the rights issue concludes.
According to an ET report, an email sent by the management team to employees reads, “Unfortunately, despite our efforts, we haven’t yet secured approval to access the rights issue funds, because of the action of four foreign investors.However, we have arranged an alternative line of credit to ensure timely payments.”
The delay in salaries was caused by conflicts with foreign investors, hindering fund utilization. It had been reported on April 1 that Byju’s has delayed salaries for employees yet again as it battles a severe cash crunch.
Also Read | Apple Awas Yojana? Apple ecosystem to now build residential facilities for workers after creating 1.5 lakh direct jobs
Byju’s is currently dealing with legal matters involving investors opposing the rights issue and the potential removal of founder Byju Raveendran as CEO. The company sought arbitration to settle a dispute over a $200-million rights issue.
The Karnataka High Court has also further prolonged the temporary halt on the results of an Extraordinary General Meeting (EGM) arranged by investors to oust company founder Byju Raveendran from his position as chief executive back in February. Raveendran has also informed shareholders of his proposal to allow the estranged investors an opportunity to participate in the rights issue.
Also Read | IT sector hiring outlook: What analysis of data on Infosys, TCS, Wipro, HCL suggests
The ongoing rights issue is being offered at a significant discount of 99% to the company’s peak valuation of $22 billion.
Investors not engaging in the funding may face a loss of their shareholding after the rights issue concludes.
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