Edtech start-up Byju’s has finally started disbursing the March salary to its employees. The embattled firm is expected to complete the payment by April 18, as per a report by the Economic Times.
In an email to the employees, the management team of Byju’s said, “Unfortunately, despite our efforts, we haven’t yet secured approval to access the rights issue funds because of the action of four foreign investors.” As per the Economic Times, the management team further said that they have arranged an alternative line of credit to ensure timely payments.
Here, the four investors refer to Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA. The investors had approached the National Company Law Tribunal (NCLT) against Byju’s.
The investor has been trying to block a $200 million rights issue and remove the board of directors, comprising founder Byju Raveendran, his wife and co-founder Divya Gokulnath, and brother Riju Raveendran. To resolve the issue with the investors, Byju’s has sought arbitration. The matter will be heard again on April 23.
Byju’s has been in a deep financial crisis. The company sold most of its office spaces in India, except for the Bengaluru headquarters. Similarly, the ed tech start-up delayed salaries for its employees on April 1, as per a report by the Economic Times.
In a note to its employees, the company said, “We are writing to you today with a heavy heart but with a message of hope and reassurance. We regret to inform you that there will again be a delay in the disbursement of salaries. A few misguided foreign investors in Byju's have obtained an interim order in late February that has restricted usage of the funds raised through the successful rights issue. This irresponsible action by the four foreign investors has compelled us to temporarily hold the disbursal of salaries until the restriction is lifted.”
