Byju’s forms working group with founders, top investors 

Byju’s has established a working group comprising its founders and top six investors, including Prsus, Peak XV Partner (formerly Sequoia Capital), General Atlantic, Sofina and Chan Zuckerberg Initiative, according to people in the know.

The group was formed based on the guidance of the Board Advisory Committee (BAC), which includes former Infosys CFO TV Mohandas Pai and former State Bank of India chairman Rajnish Kumar. The BAC  intends to rebuild burnt bridges, improve the founders’ relationship with key stakeholders and enhance coordination on ongoing restructuring initiatives & divestments.

Byju’s promoters and existing board members will keep the working group informed of the progress on the sale of Great Learning and Epic, debt settlement with Davidson Kempner and the $1.2-billion Term-Loan B (TLB), the dispute resolution with Aakash promoters on share swap, and the conversations around its new funding round, said people aware of the matter.

The company’s relationship with its stakeholders had broken down when three board members GV Ravishankar of Peak XV, Vivian Wu of Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus stepped down from the board in June, leaving the founder and CEO, Byju Raveendran, wife Divya Gokulnath, and brother Riju Raveendran, the only three left on the board.

Prosus, and Peak XV had explicitly cited lapse in governance practices, and a lack of willingness from the founders to take in advice from the other board members, as the reason for quitting.

“The group will have regular interactions, and promoters will keep them informed about progress of the restructuring and the other important corporate level developments,” said one of the people aware of the developments at the company.

The development comes after the company placed two of its assets including higher education platform Great Learning and digital reading platform Epic on sale, in an effort to raise funds immediately to meet the repayment obligations towards the $1.2 billion term loan B, with a promised upfront payment of $300 million by December.

Founders of Great Learning are reportedly in early discussions to buy the company back from Byju’s. Meanwhile, according to sources, the company expects to close the sale of Epic first. It is hoping to make up close to a billion dollars from both these divestments.  

While the company has identified potential suitors for Epic, it is awaiting a response from the TLB lenders on the repayment proposal it has put forth. The proceeds from a potential sale of EPIC will go towards repaying the first tranche of $300 million if the amendment proposal is accepted.