In what can be seen as a relief for Byju’s, the majority of shareholders of edtech firm, have approved the company’s resolution to increase its authorised share capital to absorb $200 million raised through the rights issue.The EGM held on March 29 was opposed by a group of investors in the company.
“The extraordinary general meeting (EGM) held on March 29, 2024, has been approved by a majority of 55% of the total votes polled. The voting process, which included both the EGM and a postal ballot that concluded on April 6, 2024, has been duly scrutinised by an independent third party,” the company said in a statement.
However, the National Company Law Tribunal’s (NCLT) direction which bars Byju’s from using the proceeds from the rights issue continues. As such the funds raised through the rights issue cannot be used to disburse salaries or for any other purpose till further orders.
The group of four investors — Prosus, General Atlantic, Sofina, and Peak XV — along with support from other shareholders, including Tiger and Owl Ventures, had approached the NCLT against the EGM.
These investors are understood to have a holding of around 30% in Byju’s.
“We are grateful to our investors for their support and understanding during this pivotal phase. Their invaluable support in providing essential working capital underscores their collective commitment to our renewed growth push,” said Byju Raveendran, founder and CEO of Byju’s.
“The shareholder approval marks a significant threshold in our relentless push to turn around the business beset with multiple challenges, which we are resolving one by one, slowly but surely,” he added. Meanwhile, the next hearing on the investors plea is scheduled for April 23.