Edtech giant Think and Learn, operating under the BYJU'S banner, has reportedly secured a commitment of $300 million from investors for its ongoing rights issue, slated to conclude by the end of February. The company initiated a rights issue in January with the aim of raising $200 million through equity rights at an enterprise valuation ranging between $220-250 million, marking a substantial decline from its peak valuation of $22 billion.
In an attempt to address concerns from investors, BYJU'S has proposed appointing two independent directors to bolster transparency, although this offer is contingent upon the completion of the rights issue and the disclosure of financial results for the fiscal year 2023. Sources indicate that BYJU'S has received total commitments of approximately $300 million for the rights issue thus far. While some investors have suggested expanding the rights issue size, the company's current focus is on successfully concluding the existing offering.
Negotiations are underway with disgruntled investors to encourage their participation in the rights issue. BYJU's is reportedly engaging in discussions with these investors, emphasizing the potential reduction in their shareholding should they choose not to invest. Notably, a consortium of BYJU'S shareholders had previously sought meetings with the board of directors in July and December, but their requests were disregarded. Additionally, BYJU's investors lack voting rights concerning CEO or management changes as outlined in the shareholder agreement.
The substantial commitment from investors underscores confidence in BYJU'S despite recent challenges. As the company navigates these issues, securing funding through the rights issue could provide stability and facilitate future growth opportunities in the dynamic ed-tech sector.
