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Business News/ Companies / News/  Byju's mulling $400 million sale of Epic to tide over financial troubles: Report
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Byju's mulling $400 million sale of Epic to tide over financial troubles: Report

Byju’s has received three offers, totalling around $400 million, for Epic. As per the current plan, the company might need to utilise about $80-100 million from this amount while allocating the rest for term loan B (TLB) lenders, as per a report

File Image: Byju Raveendran, founder and CEO of Think and Learn speaks at an event in Hong Kong (Photographer: Paul Yeung/Bloomberg)Premium
File Image: Byju Raveendran, founder and CEO of Think and Learn speaks at an event in Hong Kong (Photographer: Paul Yeung/Bloomberg)

Struggling edtech company Byju's is facing significant financial difficulties, prompting consideration of using funds from the potential sale of its unit, Epic, to sustain its operations at Think & Learn, as per an Economic Times report citing multiple sources.

Byju’s has received three offers, totalling around $400 million, for Epic. As per the current plan, the company might need to utilise about $80-100 million from this amount while allocating the rest for term loan B (TLB) lenders, it added.

The crucial aspect revolves around the speed of finalising the deal and transferring the funds. Simultaneously, Byju’s is actively exploring various avenues to secure the necessary financing. Reportedly, Joffre, a buyout firm focused on technology, is leading the race.

Also Read | Saving edtech company Byju's: Inside the great rescue act

A source mentioned the company's urgency to conclude the Epic sale before the holiday season, ensuring the transaction's closure before investors proceed on the Christmas and New Year holidays.

Byju's did not respond to queries, as per the report.

A mountain of troubles

As per a Bloomberg report on December 4, Byju Raveendran, the eponymous founder of Indian edtech titan Byju’s, has pledged his home as well as those owned by his family members to raise money for paying employees as the company battles a cash crunch, according to people familiar with the matter.

Two homes owned by the former billionaire’s family in Bengaluru, in southern India, and his under-construction villa in Epsilon — a plush gated community in the city — were offered as collateral to borrow $12 million, the people said, asking not to be named as the information is not public. The startup used the funds to pay salaries to 15,000 employees in Byju’s parent firm, Think & Learn Pvt., on Monday, they said.

The founder has been pulling all stops in his fight to keep the company afloat and to ease its financial pressures.

Also Read: Byju's faultlines and the perils of easy money

On December 2, it emerged that Byju's had delayed the salary of around 1000 employees due to an ‘unexpected technical glitch’. The beleaguered company said it was working to fix the issue and planned to credit the pending sum by December 4.

The impacted individuals reportedly fall under the company's parent firm — Think & Learn. The delay appears to have affected people across staff levels. However, workers affiliated with its test preparation subsidiary (Akash Institute) were not impacted.

Hit-after-hit

It has been hit-after-hit for the troubled unicorn. Earlier on November 29, the company stated that it was slammed with violation of the FEMA rules by the Enforcement Directorate (ED). The firm said that it has received the notice from the Enforcement Directorate which now definitively concludes their investigation and the same has been stated in their press release dated November 21.

The clarification came following reports that the ED had issued show cause notices to Byjus for violations under the Foreign Exchange Management Act (FEMA) violations amounting to 9362.35 crores.

However, the same day Dutch investor Prosus Ventures axed the valuation of Byju’s by more than half to below $3 billion, in another setback for the edtech giant battling lenders, lawsuits, and investigations.

This is the third time the tech investor, which owns 9.67% of Byju’s, has marked down the company’s valuation, after slashing it to $5.9 billion last November and further to $5 billion this June. At its peak in July 2022, Byju’s was India’s most-valued startup worth $22.5 billion.

Prosus interim group chief executive Ervin Tu and group chief financial officer Basil Sgourdos said it had written down a further $315 million on its Byju’s investment. The company has invested $536 million in Byju’s since 2018.

On November 28, the ed-tech firm also said it is in talks with the Board of Control for Cricket in India (BCCI) to settle a pending insolvency matter filed against it in the Bengaluru National Company Law Tribunal (NCLT).

“We are in discussions with the Board of Control for Cricket in India to settle the matter and we hope to achieve that soon," said the ed-tech firm’s spokesperson without divulging any further details.

The BCCI in September applied to the Bengaluru bench of NCLT against Think & Learn which operates Byju’s, for defaulting on dues of close to 160 crore. The case pertains to the dispute around the sponsorship rights of the Indian cricket team’s jerseys.

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Published: 05 Dec 2023, 02:18 PM IST
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