With Byju’s $200 million rights issue fully subscribed, founder-CEO Byju Raveendran on Wednesday wrote to the shareholders expressing his gratitude. Raveendran said that he has personally put in $1.1 billion in the company over the last two years to pay salaries and maintain operations as he views it as his Dharma and duty and not an obligation. Sources said that Raveendran is set to put $45-$46 million in the rights issue to preserve his shareholding in the company.
“I understand that participating in this rights issue may seem like a Hobson’s choice. However, this is the only viable option in front of us today to prevent permanent value erosion. I’m reminded of the words of Abraham Lincoln – “A house divided against itself cannot stand.” We must stand together and act in the best interest of the Company,” he added.
Raveendran’s letter to the shareholders comes ahead of an extraordinary general meeting on Friday that a few of the company’s largest investors have called, in a bid to oust the company’s leadership and reconstitute its board.
Sources said the dissenting shareholders would be able to participate in the issue till February 29, else their stakes will get diluted.
“Our rights issue is fully subscribed and my gratitude to my shareholders remains strong. But my benchmark of success is the participation of all shareholders in the rights issue. We have built this company together and I want us all to participate in this renewed mission. Your initial investment laid the foundation for our journey and this rights issue will help preserve and build greater value for all shareholders,” Raveendran wrote to the shareholders.
As reported by Fe, Raveendran committed to restructuring the board and appointing two non-executive directors to the board by the mutual consent of the founder and shareholders after the FY23 audit, which is expected to close by the end of the quarter.
“To ensure transparency with regard to the usage of funds raised through the rights issue, we will appoint a third-party agency to monitor the same. This agency will report to all shareholders on a quarterly basis, within 45 days from the end of the quarter, along with commentary from the Board,” he added.
Raveendran said that as the largest shareholder of the company, it would have been in his best interest to price this rights issue high, but that would not be in the best interest of the company.
He also said that despite negative investor sentiment towards the board, customer belief in the brand has remained undeterred. “We are launching Byjus Wiz, an AI-powered tool designed to be a true study companion for students. Our AI model, trained with our proprietary data generated over the last 8 years and integrated with the Geogebra’s maths engine, delivers an impressive 99% accuracy in answers, surpassing any other model currently available globally. Brand Byju’s is not just alive, it is also kicking,” he added.