Byju’s begins salary disbursements amid delay in payments for two months

Byju's salary

Embattled edtech firm Byju’s begins salary payments after delaying for the past two months even as it is barred from using proceeds of recently floated rights issue.

“We are pleased to inform you that salary disbursement has commenced today and will be completed over the next 10 days,” said Byju’s management, in an email to employees on April 8.

In the email, the company added that despite efforts, it has not yet secured approval to access the rights issue funds, because of the action of four of its investors.

This comes as the National Company Law Tribunal (NCLT) directed the edtech company to keep funds received from the rights issue in an escrow account till the disposal of the oppression and mismanagement plea filed by four of the company's investors.

The plea was filed by Byju’s investors, including Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA, who opposed the company's decision to raise $200 million at a post-money valuation of $225 million, which is 99 percent lower than the company's last funding round which happened at a valuation of $22 billion.

“However, we have arranged an alternative line of credit to ensure timely payments. We sincerely appreciate your patience and understanding throughout this period,” they added.

This comes days after Byju’s decided to hold off its staff salaries for the second month in a row as it awaits a green signal from the National Company Law Tribunal to use funds from the recently floated rights issue.

The development comes as Byju's is facing acute financial strain with the company unable to afford salaries and regular operations. Byju’s has also run into a series of troubles with its stakeholders, including its board, auditors, investors, employees and government institutions like Employees' Provident Fund Organisation, Board of Control for Cricket in India and the Enforcement Directorate.

In the latest development, Think and Learn has been asked by an emergency arbitrator not to sell around 6 percent stake in its subsidiary Aakash Education Services Limited as it has failed to pay back around Rs 350 crore raised from billionaire Ranjan Pai-led MEMG Family Office.

Meanwhile, this comes hours after Byju’s-owned test prep firm Aakash appointed former Pearson India managing director Deepak Mehrotra as its new chief executive officer.