Byju's logo.
Credit: Reuters Photo
Bengaluru: The board of Think & Learn Private Limited (TLPL), the parent company of embattled edtech firm Byju’s, held an extraordinary general meeting (EGM) of Friday morning where a resolution to increase the authorised share capital of the company was passed, sources close to the matter said. This will pave the way for the company’s $200 million rights issue opened last month at a valuation discounted by 90%.
The EGM was attended by 20 investor representatives, and while miffed investors, who had tried to oust chief executive officer Byju Raveendran and his family from the company’s leadership, skipped it. The meeting achieved the quorum required, sources quoted above added.
A group of four investors -- Prosus, General Atlantic, Sofina, and Peak XV -- along with support from other shareholders, including Tiger and Owl Ventures, had approached the National Company Law Tribunal (NCLT) against Byju's EGM.
However, the court on Thursday had granted the company permission to go ahead with the meeting even as investors argued that the company should not be allowed to make amends belatedly. The next hearing on the case will be held on April 4.
The shareholders could choose to vote either at the EGM or through ballot. “Further details on the voting and culmination of the rights Issue will be shared later post the scrutiniser's report,” the source said.
The rights issue was opened to allow existing investors to purchase additional shares in the company at a discount, which would provide Byju’s much needed runway after it failed to raise additional capital for at least a year.
A cohort of existing investors, including Prosus, Peak XV, and the Chan Zuckerberg Initiative, didn’t participate in the rights issue, even as it could lead to the dilution of their holdings in Byju’s. All three had abruptly resigned from Byju’s board last year over its governance practices.
They have instead sought to invalidate the issue, which is oversubscribed as per the company, through litigation. The Bengaluru NCLT last month directed Byju’s to keep proceeds from the issue in an escrow account until the petition has been disposed of.