Edtech firm Byju’s on Monday started paying salaries for March after delaying them for two months, giving relief to its employees. It is expected that the salary payout process will be completed by April 18.
The edtech company, in an email sent to its employees seen by Economic Times, stated that it has arranged an alternative line of credits to pay salaries on time.
“We are pleased to inform you that salary disbursement has commenced today and will be completed over the next 10 days. However, we have arranged an alternative line of credit to ensure timely payments. We sincerely appreciate your patience and understanding throughout this period,” the email read as quoted by ET.
However, Byju’s has still not secured any approval to access the rights issue funds. Presently, the company is not allowed to use the proceeds of recently floated rights issue.
Byju’s investors including Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA, have filed a plea challenging the company’s decision to raise $200 million at a post-money valuation of $225 million.
Following this, the National Company Law Tribunal (NCLT) has ordered Byju’s to retain the funds from the rights issue in an escrow account until the plea is resolved, resulting in the delay of its staff salaries. The company also sought arbitration in its dispute with its key investors.
The NCLT has given Byju’s 10 days to file its response in the matter. The case will be next heard on 23 April. On April 5, an arbitrator asked Byju’s to not sell the shares of a group firm after it breached terms of loans worth $42 million.
The startup, which was once valued at $22 billion, has seen its valuation fall sharply after a series of exits by auditors, investigations by regulators and allegations by investors. Byju’s, however, continues to deny any wrongdoing. It is now valued at around $250 million, a steep fall of 99 per cent from its peak.
Byju’s authorized share capital is ₹6.5 crore, whereas the rights issue’s face value is ₹40 crore, in conflict with provisions of the Companies Act. This led the company to call for an EGM for increasing the authorized share capital of the company.
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Published: 09 Apr 2024, 09:07 AM IST