Edtech company Byju’s founder and CEO, Byju Raveendran has reportedly secured a private debt in order to pay the company’s employees’ February and March salary. As per reports, the CEO has secured a private debt of approximately ₹30 crore to cover the March salaries of employees amidst financial challenges faced by the edtech company due to its ongoing NCLT dispute.
As per the reports, while the senior members of the company received partial payments, the teachers and low-level employees were paid in full for the month of March. This follows after the company had announced a delay on march salaries and partial payments for February.
Byju’s, once valued at around $22 billion has plummeted to about $225 million. The cause of this is its ongoing dispute with its investors over unauthorised increase to its share capital. The delay in salaries is due to funds raised through a recent rights issue, which have been locked in a separate account due to this ongoing dispute with investors. Byju’s, with about 15,000 employees, has a total salary expenditure ranging between ₹40 and 50 crore, as per reports.
Byju’s NCLT dispute:
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 NCLT ordered Byju's to retain the funds from the rights issue in an escrow account until the plea is resolved, resulting in staff salaries getting delayed. 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 April 23. On April 5, an arbitrator asked Byju's to not sell the shares of a group firm after it breached the terms of loans worth $42 million.