As the largest shareholders, the founders of BYJU’S have invested more than $1.1 billion in the last 18 months.
In a note addressed to shareholders, the founders expressed the challenges the company has faced in recent months and their unflinching belief in the mission of Byju’s.
“The funds raised will be exclusively utilised to clear immediate liabilities and meet operational requirements, while maintaining the current rights of our valued shareholders,” said Byju Raveendran, Founder of the edtech major.
“I am also happy to share that Byju’s is now less than a quarter away from achieving operational profitability, reflecting the effectiveness of our strategic initiatives and the resilience of our business model,” he added.
This rights issue aims to offer all existing shareholders the chance to participate in this proposed capital raise to maintain shareholding without the need to ascribe valuations.
Meanwhile, overseas lenders of Byju’s $1.2 billion term loans last week said they have filed a petition before the Bengaluru Bench of the National Company Law Tribunal (NCLT) to initiate corporate insolvency resolution proceedings against Think & Learn Pvt Ltd.
The GLAS Trust Company LLC (as administrative agent and collateral agent of the Term Loans) filed a petition pursuant to Section 7 of the Insolvency and Bankruptcy code of India, 2016.
“The myriad issues facing Byju’s are entirely self-inflicted. For months, we sought to avoid this exact situation, repeatedly attempting to engage constructively with Byju’s management and other stakeholders and providing them with multiple paths to reach a mutually agreeable resolution, even including after the Delaware court confirmed the validity of Byju’s’ defaults,” the Ad Hoc Group said in a statement.
Byju’s had secured $1.2 billion in debt through a term loan facility from a consortium of foreign investors in November 2021.
Byju’s had said in a statement that the validity of lenders’ actions, including acceleration of the term loan, “is pending and under challenge in several proceedings, including before the New York Supreme Court”.
“Hence, any proceedings by lenders before NCLT are premature and baseless,” it added.
Byju’s said that the timing of the lenders’ proceedings coincides with the commencement of a rights issue by the company.