Byju’s investors, also affected by the ongoing financial crisis, will vote on Friday to remove current board members, including CEO and founder Byju Raveendran. The destiny of Raveendran in the edtech business will be decided by the shareholders of Byju’s parent company Think and Learn Pvt Ltd during a special meeting scheduled by a group of investors on Friday.
With 26% of the total shares, the three members of Byju’s board—CEO Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran—are currently the company’s largest stockholders. Raveendran will lead the vote, casting a no vote on the proposal.
Approximately 25% of Byju’s shares are owned by the group of investors that asked for the extraordinary meeting (EGM). Since they lack voting rights, they will not participate in the vote. This is a result of their signing the shareholders’ agreement, which gave up their power to vote. Resolutions regarding financial mismanagement, outstanding governance, and restructuring the board to remove founder control will all be discussed during the EGM.
The shareholders, in response to financial mismanagement and mistreatment of minority shareholders, have the right to file a lawsuit in the company law tribunal against the founders and board members of Byju’s. When Byju Raveendran was first proposed for removal from the board, the firm responded with a statement stating that the shareholders had no authority to decide on Byju’s new leadership.
Byju’s gets $300 million commitment
Think and Learn, which operates under Byju’s brand name, is said to have obtained a USD 300 million commitment from investors for its current rights offering, which is expected to conclude by the end of February.
In January, Byju’s announced a rights issue to earn USD 200 million through an equity rights offering at an enterprise valuation of USD 220-250 million, a 99 percent decrease from its peak valuation of USD 22 billion.
Byju’s has obtained a total commitment of around USD 300 million for the rights as of today. Some investors have recommended expanding the amount of the rights issue, but the company’s objective is to conclude the present deal successfully.
Byju’s recent Financial status
Over the last two years, BYJU’S has faced an extensive number of issues, ranging from uncontrollable losses to business model challenges, investor disagreements, and legal fights with creditors and vendors.
BYJU’S is likely to record total sales of roughly INR 6,500 crore in the fiscal year 2022-23, which ends March 31, 2023. This is 23% greater than the consolidated income of INR 5,298 Cr recorded by parent company Think & Learn Private Limited in FY22.
BYJU’s net loss increased 81% year on year to INR 8,245.2 Cr (near $1 Bn) in FY22, as WhiteHat Jr and other loss-making acquisitions continued to weigh on the bottom line. In FY22, the startup’s overall costs nearly increased to INR 13,668 crore.
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