Shareholders approved rights issue to tackle cash crunch: Byju’s
EDTECH firm Byju’s on Monday said that its shareholders have approved the rights issue, paving the way for its parent company Think & Learn Private Limited to issue fresh shares and conclude the rights issue aimed at tackling the severe cash crunch as the company is struggling to pay its employees.
The company said the vote for an increase in authorised share capital put forth in the form of a postal ballot and the extraordinary general meeting (EGM) held on March 29, has been approved by a majority of 55 per cent of the total votes polled.
“The voting process, which included both the EGM and a postal ballot that concluded on April 6, has been duly scrutinised by an independent third party,” it said in a statement.
The approval of the EGM proposals clears the hurdle for Byju’s to address the liquidity crunch, including unpaid salaries, regulatory dues and vendor payments.
“We are grateful to our investors for their support and understanding during this pivotal phase. Their invaluable support in providing essential working capital underscores their collective commitment to our renewed growth push,” said Byju Raveendran, Founder and CEO of Byju’s.
“The shareholder approval marks a significant threshold in our relentless push to turn around the business beset with multiple challenges, which we are resolving one by one, slowly but surely,” he added.
The culmination of the rights issue will set the stage for the launch of Byju’s 3.0.
Earlier in the day, the company announced that Arjun Mohan, who was elevated as the embattled edtech firm’s CEO some seven months back, has moved on to pursue other opportunities.
Raveendran will now take a more hands-on approach in spearheading the daily operations of the company.
Mohan will be part of the edtech firm in an “external advisory role”.
“The changes follow an extensive seven-month operational review and cost optimisation exercise led by outgoing Byju’s India CEO Arjun Mohan. Mohan will now transition to an external advisory role, lending his deep edtech expertise to the company and its founders during this transformation phase,” the company said.
The company hasn’t given any reason for Mohan’s move.
Giving details of the proposed consolidation, Raveendran said, “This reorganization marks the start of Byju’s 3.0 -- a leaner and more agile organization ready to quickly adapt to evolving market dynamics, especially in the realm of hyper-personalised education.”
“By focusing on our core strengths with three specialised business units, we will unlock new growth opportunities while continuing to focus on profitability,” he said.
Byju’s had made Arjun Mohan the chief executive officer (CEO) of its India business in September last year, replacing Mrinal Mohit. Mohan was working at rival edtech firm UpGrad earlier.
“Arjun (Mohan) has done an outstanding job steering Byju’s through a challenging period,” said Raveendran on Monday. “We are grateful for his leadership and look forward to his continued contributions as a strategic advisor.”
This new phase will also see Byju Raveendran taking a more hands-on approach in spearheading the daily operations of the company. Over the past four years, he has focused primarily on strategic aspects such as raising capital and driving global expansion.
