Mumbai: Edtech firm Byju’s Think & Learn rights issue has been fully subscribed, founder and chief executive Byju Raveendran said in a letter to shareholders on Wednesday.
“Our rights issue is fully subscribed and my gratitude to my shareholders remains strong,” the letter said. Mint reviewed a copy of it.
“But my benchmark of success is the participation of all shareholders in the rights issue,” said Raveendran. “I understand that participating in this rights issue may seem like a Hobson’s choice. However, this is the only viable option before us today to prevent permanent value erosion,” he added.
Earlier this month, the company announced its right to raise about $200 million, valuing the company at $22 million or 0.1% of what it was once valued at $22 billion.
The rights issue helps the company, which is facing several challenges, to get through the immediate liquidity crisis and also help it pay its vendors and debtors.
“This $200 million raise will give our Company the capital it needs to ensure we can take care of current liabilities as well as provide sufficient growth capital to return us to our former glory,” the letter said.
Of this $200 million, Raveendran and his family chipped in $45 million to maintain their roughly 23% stake in the company, sources with knowledge of the fundraising said.
Raveendran fell out with his major shareholders, who proposed calling an extraordinary general meeting to propose his removal as the group’s CEO.
“My duty to my shareholders remains steadfast. In order to increase shareholder representation, I undertake to restructure the Board and appoint two non-executive directors to the Board by the mutual consent of the founder and shareholders; immediately following the FY23 Review, which we expect to close by the end of this quarter. I believe this will be in the best interest of the Company and allow for greater engagement with shareholders,” the letter said.
“To ensure transparency regarding the use of funds raised through the rights issue, we will appoint a third-party agency to monitor the same. This agency will report to all shareholders every month, within 45 days of the end of the quarter, along with a comment from the Board.”
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Published: 21 Feb 2024, 10:11 IST