'Deeply concerned about future stability...': Byju's major investors seek leadership change, board reshuffle

Byju's major investors said on Thursday that they are seeking a reconstitution of the embattled edtech firm's board, including a change in leadership, at an upcoming extraordinary general meeting.

"We are deeply concerned about the future stability of the company under its current leadership and with the current constitution of the Board," the shareholders said in the statement.

"Pursuant to the rights granted to shareholders under the Companies Act, 2013, a notice has [today] been issued to Think & Learn Private Limited (T&L) shareholders requesting an extraordinary general meeting (EGM) to address persistent issues. The request for an EGM is supported by a consortium of T&L shareholders and follows earlier notices of requisition sent to the T&L Board of Directors in July and December 2023, which were disregarded.

"The resolutions being put forward for the EGM to consider include a request for the resolution of the outstanding governance, financial mismanagement and compliance issues; the reconstitution of the Board of Directors, so that it is no longer controlled by the founders of T&L; and a change in leadership of the Company," the shareholders said.

The statement was shared by Prosus, which has a roughly 9% stake in Byju's, and said it had backing of a "number of major investors", without naming them. Others supporting the statement include Sofina and Peak XV, Reuters reported citing a source with direct knowledge of the matter.

At present, the company's board consists of founder and CEO Byju Raveendran himself, his co-founder and wife Divya Gokulnath, and his brother Riju Ravindran, following the departure of other members last year.

On Monday, Byju’s said it will raise $200 million through a rights issue of shares to clear “immediate liabilities” and for other operational costs, as the cash-strapped company aims to stabilise its business.

Byju’s, which is backed by investors such as General Atlantic, Prosus and Silver Lake, did not say if they have already approached any shareholders nor at what price or by when it aims to complete the fundraise.

The company has been roiled by a string of setbacks, with the latest being a group of lenders initiating bankruptcy proceedings against it. It has also been negotiating the repayment of a $1.2 billion term loan in the last few months.

Byju’s has been looking to raise more than $100 million from its existing shareholders — but at a steep 90% discount to the $22 billion valuation in its last funding round in 2022 — to pay vendors, Bloomberg News reported last week.

Earlier this month, BlackRock slashed Byju’s valuation by 95% to $1 billion, while tech investor Prosus NV chopped it to under $3 billion last November.