Investors want to revamp the board to gain control of the company
Byju Raveendran, the CEO of BYJU’S, has purportedly requested the company’s investors to invest $300 million in the company in return for a higher ownership stake. This request comes amidst legal and governance issues faced by BYJU’S, leading shareholders to call for a restructuring of the board to have more control over the company’s functioning, according to Business Standard who first stated this development. The shareholders’ call for a change is viewed as a tactic to enhance their sway over the decision-making procedures within the company.
The proposal is presently in the negotiation phase, and an agreement is anticipated in the upcoming months.
BYJU’s has secured around $6 billion in funding from notable investors like Qatar Investment Authority, General Atlantic, Sumeru Ventures, Vitruvian Partners, BlackRock, Peak XV Partners, Chan Zuckerberg Initiative, Tencent, and Tiger Global.
Recently, BYJU’S has encountered a series of challenges, including a legal dispute with lenders regarding the repayment of a $1.2 billion Term Loan B, financial constraints, substantial cash depletion, workforce reductions, departures of high-ranking executives, auditor resignations, and the departure of key stakeholders. Additionally, the company is facing scrutiny from the Enforcement Directorate (ED) for alleged violations of the Foreign Exchange Management Act (FEMA).
BYJU’S convened its annual general meeting (AGM) last week, during which stakeholders greenlit the financial statements for FY22. In a statement released the previous month, BYJU’S revealed that its parent entity, Think and Learn Private Ltd, recorded an EBITDA loss of INR 2,253 crore in FY22, a decrease from INR 2,406 crore in FY21. The entity’s total income for FY22 amounted to INR 3,569 crore, a significant rise from INR 1,552 crore in the preceding fiscal year. However, the company chose not to disclose other crucial metrics from the notably delayed financials.
Raveendran’s reported move to seek additional funding underscores the myriad challenges faced by BYJU’S as it grapples with a complex landscape of financial, governance, and regulatory issues.
Also read: Byju’s AGM turns tumultuous: Investors clash over financials
