Bengaluru: Byju’s will delay March salaries to its employees, the third straight month when the embattled edtech company has struggled with disbursements, and blamed its ‘foreign investors’ for the financial woes.
In an email to employees on Monday, the company said ‘a few misguided foreign investors in Byju’s have obtained an interim order in late February which has restricted usage of the funds raised through the successful rights issue’. It said that the company is following a parallel line of credit to ensure disbursal of salaries by 8 April.
Mint has seen a copy of the email.
“We are writing to you today with a heavy heart but with a message of hope and reassurance. We regret to inform you that there will again be a delay in the disbursement of salaries…This irresponsible action by the 4 foreign investors has compelled us to temporarily hold the disbursal of salaries until the restriction is lifted,” it said.
“We have full faith in the Indian judicial system and we eagerly await a favourable outcome that will enable us to utilise the funds raised through the rights issue and alleviate the financial challenges that we are currently facing,” it added.
Cash-strapped Byju’s has been struggling to pay salaries on time since January this year. The company credited salaries for the month of January in February. “I have been moving mountains for months to make payroll, and this time, the struggle was even bigger to ensure that you receive what you rightfully deserve,” Raveendran had told employees in an email in February. The company has paid a portion of February salaries and said it will ‘pay the balance once the rights issue funds are available’.
A group of four investors – Prosus NV, General Atlantic, Sofina, and Peak XV Partners, with support from Tiger Global and Owl Ventures – had moved the the National Company Law Tribunal (NCLT) against Byju’s $200-million rights issue at a 99% discount to the company’s peak valuation of $22 billion. On 27 February, the NCLT directed the company to keep the proceeds from the rights issue in a separate escrow account, and not withdraw the funds till the disposal of the suit filed by the investors.
“On a positive note, we have the necessary vote to increase the authorised capital for the rights issue. It means that once the restrictions on using the raised funds are lifted, we can meet all our salary commitments immediately. As you might have read, our founder, Byju Raveendran, has once again appealed to disgruntled investors in a collaborative spirit, and we are hoping that litigating investors would have a reasonable spirit in not frustrating our daily lives any longer,” the company said in the email.
According to media reports, Byju’s has vacated its offices across the country except its headquarters at IBC Knowledge Park in Bengaluru in an attempt to cut costs.
“We understand the feelings of helplessness that may arise due to these circumstances, and we share your frustration. However, we urge you to hold onto hope and remain resilient. Byju’s has overcome challenges recently, and we firmly believe that together, we will overcome this last hurdle,” it added.
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Published: 01 Apr 2024, 07:05 PM IST