“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 management team wrote in an email, reviewed by ET.
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ET reported on April 1 that the Bengaluru-based startup delayed salaries for employees yet again as it battles a severe cash crunch. Employees were informed that their salaries would be delayed due to actions by warring investors that have restricted usage of funds through a rights issue.
Byju’s is currently defending a matter filed by a group of investors led by Dutch investor Prosus seeking to block the rights issue and the removal of founder Byju Raveendran as CEO. Last week, Byju’s sought arbitration to resolve a dispute with investors over a $200-million rights issue.
The Karnataka High Court had also extended the interim stay on outcomes of an EGM called by investors to remove company founder Byju Raveendran as chief executive in February. Raveendran also told shareholders he is offering the estranged investors a chance to invest in the rights issue.
Byju’s rights issue is happening at a 99% discount to the company’s peak valuation of $22 billion. This means any investor not participating in the funding will see their shareholding wiped out post the completion of the rights issue.
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