Byju's forced to borrow funds to cover March salaries

Edtech firm Byju's partially paid March salaries to employees using personal debt raised by CEO Byju Raveendran. Salaries, ranging from 50-100%, were credited on April 20th. The company faced a blockage of funds from a rights issue. Foreign investors have filed a complaint with NCLT against the founders and rights issue, with a hearing scheduled on April 23rd. Despite the partial payments, concerns remain about the sustainability of the salary payment method and the company's overall financial situation.

PTI | New Delhi | Updated: 22-04-2024 14:46 IST | Created: 22-04-2024 14:46 IST
Byju's forced to borrow funds to cover March salaries
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Edtech firm Think and Learn, owner of Byju's brand, credited partial salaries of employees for the month of March, according to sources.

Byju Raveendran, the Founder and CEO of Think and Learn, has raised debt in his personal capacity to pay the salaries of employees for March.

Byju's salary expenses for partial payouts is estimated to be in the range of Rs 25-30 crore.

The salary was credited on Saturday, April 20, in the account of employees.

According to the source, the amount paid is between 50-100 per cent of salary.

''Byju raised more personal debt to pay salaries this month. While the rights issue money is still blocked by the foreign investors, '' a source said.

''Teachers and people at the lower end of the pyramid have been paid 100 per cent,'' the source said.

The company had raised USD 200 million through a rights issue to meet its operational requirements, including expenses related to employees' salaries.

A group of four investors -- Prosus, General Atlantic, Sofina, and Peak XV -- along with the support from other shareholders, including Tiger and Owl Ventures, have approached NCLT against the founders as well as the rights issue which may lead to change in shareholding pattern in the company.

The hearing in the matter before the court is scheduled on April 23.

''Paying salary through debt is not a sustainable model. The situation will become more complicated after the court goes on leave,'' a source said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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