Byju’s may move court to use rights-issue funds for salary payments

livemint.com:

Mint, requesting anonymity. This follows a company-wide email by founder Byju Raveendran on Saturday which said that the firm was facing difficulties in disbursing February salaries to its approximately 20,000 employees. The company's monthly salary expenditure amounts to about $10 million, the person cited above said.

Byju’s did not respond to requests for a comment on the issue. Raveendran's email to employees, though, hinted at the company's financial predicament, expressing an inability to utilize recently raised funds for salary payments. The company is "unable to utilise the funds raised to pay your hard-earned salaries…We are striving to ensure that your salaries are paid by the 10th of March.

We shall make these payments the moment we are permitted to do so as per law," the letter to the employees said. Byju’s had launched a rights issue on 27 January to raise $200 million, which concluded on 28 February, but the company has not been able to use the funds following a court order. A rights issue is open only to existing investors of a company.

Byju’s investors Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA had jointly filed a petition with the NCLT against the rights issue, citing oppression and mismanagement of the company. The four investors who collectively hold around 25% stake in Byju’s had sought interim relief on the grounds of alleged financial mismanagement and siphoning of funds by the management, according to court arguments on 27 February. The dispute stemmed from Byju's valuing itself at $20 million for the rights issue, a steep discount to its peak valuation of about $22 billion.