'Pleased to inform': Byju's begins salary payout after delay of 2 months

Edtech firm Byju's has started salary payments after delaying them for the past two months. This comes as the company is barred from using the proceeds of a recently floated rights issue.

"We are pleased to inform you that salary disbursement has commenced today and will be completed over the next 10 days," said Byju's in an email to its employees on Monday.

The company further said that despite its efforts, it has not yet secured approval to access the funds from the rights issue. This delay is due to the actions of four of its investors.

This comes as the National Company Law Tribunal (NCLT) directed the edtech company to keep the funds received from the rights issue in an escrow account until the disposal of the oppression and mismanagement plea filed by the same four investors.

The plea was filed by investors in Byju's, comprising Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA. They voiced their dissent against the company's resolution to secure $200 million at a post-money valuation of $225 million, representing a staggering 99 per cent decrease compared to the valuation from the company's preceding funding round, which stood at $22 billion.

“However, we have arranged an alternative line of credit to ensure timely payments. We sincerely appreciate your patience and understanding throughout this period,” they added.

This development follows Byju’s decision to defer staff salaries for the second consecutive month, as it awaits a green signal from the NCLT to use funds from the recently floated rights issue.

The situation arises from Byju's facing significant financial strain, unable to meet salary commitments and sustain regular operations. The company has encountered various challenges with its stakeholders, including its board, auditors, investors, employees, and government bodies such as the Employees' Provident Fund Organisation, the Board of Control for Cricket in India, and the Enforcement Directorate.