According to sources familiar with the situation, Bloomberg News reported on Tuesday that Indian edtech firm Byju’s is in advanced talks with possible new owners to obtain $1 billion in investment as it tries to quell an uprising by some investors.
Details on Byju’s is attempting to raise $1 billion to quell investor unrest
Byju’s, once considered one of India’s most successful businesses, has lost three board members representing major investors Peak XV, Prosus NV, the Chan-Zuckerberg Initiative, and auditor Deloitte in the past week, leading many to believe that the company is experiencing a governance crisis.
Deloitte announced that it was cutting relations with Byju’s citing delays in reporting some financial accounts, notwithstanding the fact that the board members did not provide a reason for their resignation. Additionally, the business was searched for possible violations of foreign currency regulations.
According to Bloomberg News, Byju’s is providing potential investors with privileges like preferred treatment in the event of a liquidation, adding that none of its current owners have that choice.
It was not immediately clear to Reuters whether Byju’s current stockholders have that choice.
The individuals, who not to be named because the material is private, told Bloomberg News that it was unclear whether the company’s founder Byju Raveendran will finally receive a capital infusion.
In response to a request for comment from Reuters, Byju’s did not answer right away.
The report also stated that the corporation will probably utilise a portion of the funds generated to settle a $1.2 billion term loan that is under dispute. Regarding the loan restructure, Byju’s and its lenders are embroiled in legal disputes in the United States.
According to three sources with direct knowledge of the matter who spoke to Reuters last Friday, the business, which was valued at $22 billion last year, has asked investors to reconsider leaving its board.
According to Bloomberg, Byju’s founder and CEO Byju Raveendran intends to reassemble the company’s board only once the fundraising is complete because new investors may fill any of the openings.