At Byju’s EGM, no objections to raise capital; paves way for $200million rights issue
The board of embattled edtech firm Byju’s concluded its extraordinary general meeting (EGM) with the key resolution to increase the authorised share capital going through without any objections, according to sources.
This comes after the board weighed moves to offer the renounced shares to dissenting shareholders — Peak XV Partners, General Atlantic, Chan-Zuckerberg Initiative and Prosus — which did not participate in its rights issue. This move will avoid further dilution of their shareholding, the company told its shareholders. But the voting process for the resolutions discussed at the EGM will go on till April 6.
The management of Byju’s holding firm, Think & Learn, also participated in the EGM, which was attended by 20 investor representatives. The board secured over 50 per cent of the votes needed to increase the authorised share capital, paving the way for its $200million rights issue. According to the sources, the dissenting investors did not attend the EGM. But sources close to the dissenting investors claimed that an authorised representative on their behalf attended the EGM.
CRUCIAL STEP
In an email to shareholders on Friday, Raveendran said the board is contemplating making the offer to disgruntled investors despite the ‘animosity’ in pursuing uncalledfor legal actions. The company continues to show ‘good faith’ towards all the shareholders and would like them to be part of the turnaround story.
“As you are aware, we closed the rights issue last month, which was a crucial step towards ensuring the sustainability and growth of our company in these challenging economic conditions. I am happy to inform you that, in response to the postal ballot, which was announced on March 7, we already got more than 50 per cent votes to the increase in authorised share capital,” wrote Raveendran in the note. businessline has reviewed the letter.
AT NCLT
“While we have received significant interest from third parties, our priority remains with our existing shareholders and, hence, we are looking at how we can extend this opportunity to all of you,” Raveendran added in his note.
A group of investors of Think & Learn, led by Prosus, had moved the National Company Law Tribunal (NCLT) Bengaluru to stay the EGM and block the rights issue fearing a near wipeout of their investments last month. The next NCLT hearing of the plea is scheduled for April 4 when all issues in the case will be addressed.