The Edtech firm, Byju’s has finally initiated salary payments after a two-month delay. The decision comes amidst hurdles faced by the company in accessing funds from a recent rights issue.
In a message addressed to its employees, the company informed them about the salary disbursement. It also revealed that the same will be completed over the next 10 days.
The conflict over Byju’s rights issue stems from a directive by the National Company Law Tribunal (NCLT). It mandated the company to place the proceeds from the rights issue in an escrow account until the resolution of a plea filed by four investors: Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA. These investors oppose Byju’s decision to raise $200 million at a post-money valuation of $225 million.
Despite this setback, Byju’s assured employees that it has secured an alternative line of credit to ensure timely salary payments, expressing gratitude for their patience and understanding. The company also explained that the delay in salary payments occurred as it awaited clearance from the NCLT to access funds from the rights issue amid a significant financial crisis.
The company highlighted that a small group of investors, comprising four individuals out of the 150+ investors, have played a role in preventing the utilisation of the raised funds for employee salaries. It described their actions as being rather brutal. It is reported that the funds are presently locked in a separate account as directed by investors.
NCLT also instructed Byju’s to keep the proceeds from the rights issue in a separate account until the resolution of the case with investors.
