Byju’s crisis: Edtech firm Byju’s started salary payments after delaying them for the past two months. This comes as the company is barred from using proceeds of recently floated rights issue. In an email to employees, the company said, “We are pleased to inform you that salary disbursement has commenced today and will be completed over the next 10 days.” It also said that it has not secured approval to access the rights issue funds.
The National Company Law Tribunal (NCLT) directed Byju’s to keep funds received from the rights issue in an escrow account till the disposal of a plea filed by four of the company’s investors- Prosus NV, Peak XV Partners, General Atlantic and Sofina SA all of whom have opposed the company’s decision to raise $200 million at a post-money valuation of $225 million.
“However, we have arranged an alternative line of credit to ensure timely payments. We sincerely appreciate your patience and understanding throughout this period,” they said.
Byju’s held off its staff salaries as the company awaited a green signal from the National Company Law Tribunal (NCLT) to use funds from the rights issue as the company faced a major financial crisis. Meanwhile, Byju’s-owned test prep firm Aakash appointed former Pearson India managing director Deepak Mehrotra as its new chief executive officer. Byju’s acquired Aakash in April 2021 in an equity and cash deal- a 70 per cent cash component and 30 percent equity component.
