Byju’s rights issue fully subscribed: CEO Raveendran in note to shareholders

“Our rights issue is fully subscribed and my gratitude to my shareholders remains strong,” the letter said. Mint has reviewed a copy of it.

“But my benchmark of success is the participation of all shareholders in the rights issue,” Raveendran said. “I understand that participating in this rights issue may seem like a Hobson’s choice. However, this is the only viable option in front of us today to prevent permanent value erosion,” he added.

Earlier this month, the company had announced its rights issue to raise around $200 million, valuing the company at $22 million or 0.1% of what it was once valued.

The rights issue helps the company, which is facing multiple challenges, to tide over the immediate liquidity crisis and also help it pay off its vendors and debtors.

“This $200 million raise will give our Company the capital it needs to ensure that we can take care of the current liabilities and also provide sufficient growth capital to get us back to our former glory,” the letter stated.

Of this $200 million, Raveendran and his family have pumped in $45 million to maintain their shareholding of around 23% in the company, people with knowledge of the fundraising said.

Raveendran has been at loggerheads with his key shareholders who have moved to call for an extraordinary general meeting to propose his ouster as the group CEO.

“My duty to my shareholders is still steadfast. In order to increase shareholder representation, I commit to restructuring the Board and appointing two non-executive directors to the Board by the mutual consent of the founder and shareholders; right after the FY23 Audit, which we expect to close by the end of this quarter. I believe this will be in the best interest of the company and allow for greater engagement with shareholders,” the letter said.

“To ensure transparency with regard to the usage of funds raised through the rights issue, we will appoint a third-party agency to monitor the same. This agency will report to all shareholders on a quarterly basis, within 45 days from the end of the quarter, along with commentary from the Board.”

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!

Published: 21 Feb 2024, 10:11 AM IST