MUMBAI: The National Company Law Tribunal in a fresh order directed Byju’s to not proceed with the second tranche of $200-million rights issue.
The Bengaluru bench of the NCLT also restrained it from using any funds that have been collected so far since the opening of the issue on May 13. It also directed the troubled edtech company to maintain status quo with regard to existing shareholders and their shareholding.TOI has seen a copy of the order, which was issued on June 12.
The second rights issue is part of the same issue through which the cash-starved company sought to raise $200 million. With certain investors not participating during the first round, the issue was not fully subscribed and hence it was split into two tranches. In the second round, the unsubscribed portion was put up for existing investors to invest on a super pro rata (a provision which allows investors to buy a larger percentage of the company) basis, sources said. Byju’s did not comment.
In their petition, a group of Byju’s investors have reiterated that due to the siphoning off funds by the startup’s management, the company is in “dire straits” and therefore, they should not be allowed to raise further money by going ahead with the second rights issue. Earlier this year, Byju’s had launched its $200-million rights issue at a valuation of $225-230 million, a 99% drop from its peak valuation of $22 billion. Byju’s had earlier claimed that its rights issue had been fully subscribed.
The Bengaluru bench of the NCLT also restrained it from using any funds that have been collected so far since the opening of the issue on May 13. It also directed the troubled edtech company to maintain status quo with regard to existing shareholders and their shareholding.TOI has seen a copy of the order, which was issued on June 12.
The second rights issue is part of the same issue through which the cash-starved company sought to raise $200 million. With certain investors not participating during the first round, the issue was not fully subscribed and hence it was split into two tranches. In the second round, the unsubscribed portion was put up for existing investors to invest on a super pro rata (a provision which allows investors to buy a larger percentage of the company) basis, sources said. Byju’s did not comment.
In their petition, a group of Byju’s investors have reiterated that due to the siphoning off funds by the startup’s management, the company is in “dire straits” and therefore, they should not be allowed to raise further money by going ahead with the second rights issue. Earlier this year, Byju’s had launched its $200-million rights issue at a valuation of $225-230 million, a 99% drop from its peak valuation of $22 billion. Byju’s had earlier claimed that its rights issue had been fully subscribed.