SUMMARY
In an email sent to shareholders, Byju Raveendran said BYJU’S board is considering making the offer despite facing opposition from investors engaged in “uncalled for legal actions”
Raveendran also informed shareholders that the startup has secured over 50% of the necessary votes to increase its authorised share capital
BYJU’S has called an extraordinary general meeting (EGM) today to pass the resolution to increase the authorised share capital following its $200 Mn rights issue
Amid the ongoing hostilities between BYJU’S and its key investors, founder Byju Raveendran has told its shareholders that the embattled edtech giant’s board is considering an offer for its disgruntled investors to participate in its rights issue.
The startup’s move to raise $200 Mn via the rights issue at a 99% valuation cut has been opposed by some of its investors – Prosus Ventures, Peak XV Partners, and Chan Zuckerberg Initiative, who did not participate in the fundraise.
In an email sent to the shareholders by Raveendran on Friday (March 29), the CEO said that the board is considering making the offer despite facing opposition from investors engaged in “uncalled for legal actions”.
Raveendran also informed shareholders that the startup has secured over 50% of the necessary votes to increase its authorised share capital following the rights issue.
“I am aware that some of our valued existing shareholders were unable to participate earlier in the rights issue. In good faith the board is considering making an offer of renounced shares to existing shareholders to ensure that there is no more dilution to their shareholding,” the CEO wrote in an email accessed by Inc42.
“I have always built BYJU’S with a spirit of equality and equity, and it has never been my intention to leave any investor behind, regardless of their shareholding size…From the very inception of this company, my vision has been to take everyone along, from one milestone to another. And it has always been my conviction that we will overcome our challenges together,” Raveendran added.
It is pertinent to note that BYJU’S called an extraordinary general meeting (EGM) today to pass the resolution to increase the authorised share capital for the rights issue. The troubled edtech giant received a breather from the Bengaluru bench of the National Company Law Tribunal (NCLT) on Thursday, which refused to order a stay on the EGM.
According to sources, the EGM started at 10 am today with approximately 20 investor representatives along with Think & Learn management. During the EGM, queries regarding the postal ballot were addressed by the chairman and company secretary, and resolutions were announced without any objections raised. The meeting concluded at 10:30 am.
Further details about the voting and culmination of the rights issue will be available later.
None of the disgruntled investors attended the EGM in person to voice their concerns, the sources cited above told Inc42.
Prosus, Peak XV, and the Chan Zuckerberg Initiative have raised concerns about governance practices at BYJU’S, which has also delayed filing its financial statements. These investors resigned from the startup’s board last year.
“Even my critics know that I have invested my everything, and even more, into this company. So, I hope that you will see the value in continuing with BYJU’S in the same spirit with which you first joined our journey,” Raveendran said in his email.
BYJU’S is at war with its investors and both parties are involved in multiple legal cases against each other. Last month, some of BYJU’S investors hosted an EGM and passed various resolutions, including those calling for the ouster of Raveendran and his family members from the management team of the edtech startup.
The latest development comes a month after BYJU’S closed its $200 Mn rights issue.
