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Business News/ Companies / News/  Byju's begins salary payout for March after delay of two months: ‘Arranged an alternative line of credit’

Byju's begins salary payout for March after delay of two months: ‘Arranged an alternative line of credit’

Byju's has been battling allegations of mismanagement by several of its investors and auditors. The salary payout process at Byju's is expected to be completed by April 18.

Byju's begins salary payout for March after delay of two months. (Bloomberg)Premium
Byju's begins salary payout for March after delay of two months. (Bloomberg)

Edtech firm Byju's on Monday started paying salaries for March after delaying it for two months. The salary payout process is expected to  be completed by April 18. 

In an e-mail sent to its employees seen by the Economic Times, the edtech company stated that it has arranged an alternative line of credit to pay salaries on time. 

“We are pleased to inform you that salary disbursement has commenced today and will be completed over the next 10 days. However, we have arranged an alternative line of credit to ensure timely payments. We sincerely appreciate your patience and understanding throughout this period,"  the email read, as per the ET report. 

However, Byju's has still not secured any approval to access the rights issue funds. Presently, the company is not allowed to use the proceeds of recently floated rights issue. 

Byju's-Investors dispute

Byju's investors including Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA, have filed a plea challenging the company's decision to raise $200 million at a post-money valuation of $225 million.

Following this, the National Company Law Tribunal (NCLT) has ordered Byju's to retain the funds from the rights issue in an escrow account until the plea is resolved, resulting in staff salaries getting delayed. The company also sought arbitration in its dispute with its key investors. 

The NCLT has given Byju's 10 days to file its response in the matter. The case will be next heard on April 23. On April 5, an arbitrator asked Byju's to not sell the shares of a group firm after it breached terms of loans worth $42 million. 

Byju's current valuation

The startup, which was once valued at $22 billion, has seen its valuation fall sharply after a series of  investigations by regulators and allegations by investors. Byju's continues to deny any wrongdoing. It is now valued around $250 million, a steep fall of 99 per cent from its peak. 

Byju's authorised share capital is 6.5 crore, whereas the rights issue’s face value is 40 crore, in conflict with provisions of the Companies Act. This prompted Byju's to call for an EGM for increasing the authorised share capital of the company.

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Published: 09 Apr 2024, 09:07 AM IST
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