BYJU’S Secures $300 Million Commitment for Rights Issue

Think and Learn, operating under the BYJU’S brand name, has reportedly garnered a significant commitment of $300 million from investors for its ongoing rights issue, set to conclude by the end of February, according to informed sources.

Rights Issue Dynamics and Valuation Adjustment:

BYJU’S initiated a rights issue in January to raise $200 million, aiming for an enterprise valuation between $220 million and $250 million. This marks a notable reduction of 99% from its peak valuation of $22 billion.

Sources reveal that BYJU’S has engaged in discussions with disgruntled investors, offering to appoint two independent directors to enhance transparency post the rights issue and declaration of financial results for the fiscal year 2023.

BYJU’S Strategies and Investor Participation:

While negotiations continue, BYJU’S prioritizes successfully closing the existing rights issue. The company is also in talks with dissatisfied investors, emphasizing the potential consequences of non-participation, which could significantly reduce their shareholding.

Plans to appoint two independent directors are contingent upon the declaration of financial results for the fiscal year 2023. BYJU’S aims to achieve full compliance with regulations before implementing governance enhancements.

Extraordinary General Meeting (EGM) and Shareholder Concerns:

An EGM scheduled for February 23, supported by notable shareholders such as General Atlantic, Peak XV, and Chan Zuckerberg, underscores concerns regarding governance, financial management, and board composition.

Despite limited voting rights on management changes, dissenting investors plan to mobilize additional support for the EGM. Should resolutions remain unaddressed, they intend to pursue legal avenues, including approaching the National Company Law Tribunal.

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