Crisis-hit edtech platform Byju's has once again delayed the salaries for its employees amidst its severe cash crunch. This also comes in the midst of an ongoing battle with the investors over the restricted usage of funds through a rights issue.
The firm in a note mentions that the 4 foreign investors irresponsibility of restricting the usage of the funds raised through the rights issue has compelled Byju's to hold the disbursal of salaries until the restrictions is lifted.
"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. 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. This irresponsible action by the 4 foreign investors has compelled us to temporarily hold the disbursal of salaries until the restriction is lifted", the company said in a note.
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However, as per media reports, the firm has assured its employees that it is arranging an alternative line of credit to ensure salaries are paid by April 8. Byju's had delayed the February salaries earlier until mid-March, but later paid a part of the dues. It had also vacated all its office spaces barring the Bengaluru headquarters and asked employees to work from home.
Byju's and its investors are engaged in a legal tussle at the National Company Law Tribunal (NCLT) regarding the company's $200 million rights issue. The petition claims unfair treatment and mismanagement.
Meanwhile, Last week, the National Company Law Tribunal (NCLT), Bengaluru, refused to stay Byju’s extraordinary general meeting (EGM) that was scheduled for March 29 to increase its authorised share capital to account for a $200 million rights issue. However, the Karnataka High Court extended the interim stay on outcomes of an EGM called by investors to remove company founder Byju Raveendran as chief executive in February.
Byju's rights issue is happening at a 99% discount to the company’s peak valuation of $22 billion. By this an investor if not participating in the funding will see their shareholding erased after the completion of the rights issue