Financial crisis at Byju's: Founder's pledge of properties and $400m debt raises concerns

Financial crisis at Byju's: Founder's pledge of properties and $400m debt raises concerns

NEW DELHI, India, Dec 4: In response to the financial challenges faced by Byju's, founder, Byju Raveendran, has pledged several properties owned by himself and his family. The collateral, consisting of two homes in Bengaluru and an under-construction villa in Epsilon, was utilized to secure a $12 million loan. The funds obtained were subsequently used to cover the salaries of approximately 15,000 employees at Byju's parent company, Think & Learn Private Limited. The edtech firm is currently grappling with various difficulties, including a financial crunch and a legal dispute related to a defaulted interest payment on a $1.2 billion term loan.

Byju Raveendran

As per the Bloomberg report, Raveendran has utilized all his shares in the parent company as collateral, securing debts of approximately $400 million. Moreover, he repaid the company $800 million, previously raised through share sales over the years, which left him facing financial constraints.

Byju's encountered challenges starting last year, initiating a workforce reduction of 2,500 employees as a cost-saving measure. In the earlier part of this year, the edtech firm carried out another round of layoffs, affecting around 1,000 employees, and encouraging voluntary resignations. Additionally, Byju's deferred offer letters for incoming employees by six months, as reported by Business Today. Some prospective employees noted delays in receiving their offer letters, with certain individuals being informed of their joining being postponed until January 2024.

On November 21, the Enforcement Directorate (ED) discovered alleged forex violations by Byju's amounting to Rs 9,000 crore, following searches at three Bengaluru premises. The case is related to Raveendran and his company, 'Think & Learn Private Limited,' under the provisions of the Foreign Exchange Management Act (FEMA) in May. Byju's has refuted reports connecting it to FEMA.

The post Financial crisis at Byju's: Founder's pledge of properties and $400m debt raises concerns first appeared on ARAB TIMES – KUWAIT NEWS.

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