Byju's Ensures Full April Pay Despite Financial Crunch

Byju's, amidst a liquidity crisis, paid full April salaries, navigating financial challenges while facing accusations from investors and legal proceedings. Uncertainty looms over its ability to meet obligations, impacting both operations and employee morale.

Byju's paid full salaries Payments:

• Byju's paid full salaries to all employees for April amidst a liquidity crisis.

• In February and March, only teaching staff and lowest salary grade employees received full payments, while other teams were partially paid.

Financial Challenges:

• Byju's requested permission from the National Company Law Tribunal (NCLT) to utilize funds from a $200 million Rights Issue to cover outstanding salaries, regulatory dues, and vendor payments.

• However, the NCLT has not yet granted relief, and the case is scheduled for a hearing on June 6, 2024.

Investor Accusations:

• Peak XV Partners, General Atlantic, Chan-Zuckerberg Initiative, and Prosus have accused Byju's of violating NCLT orders.

• They allege that Byju's issued shares to founders before increasing the authorized share capital under its recent rights issue.

Financial Uncertainty:

• With no immediate relief from the court and pending accusations, Byju's faces uncertainty in meeting its financial obligations in the upcoming months.

• The company has undergone significant layoffs, letting go of over 10,000 employees in the past two years due to financial and business challenges.

Salary Adjustments:

• Byju's temporarily linked the salaries of its sales staff in two teams to the weekly revenues they generated for about a month.

• This measure was implemented due to the company's financial difficulties, indicating the extent of the financial strain on Byju's operations.

Use of Funds:

• Byju's sought approval to utilize funds from a Rights Issue to cover salaries, regulatory dues, and vendor payments, highlighting the urgency of its financial situation.

• The delay in obtaining court approval adds to the uncertainty surrounding Byju's ability to manage its financial affairs effectively.

Legal Proceedings:

• Byju's legal challenges include allegations of violating NCLT orders by issuing shares before increasing authorized share capital.

• The outcome of these legal proceedings will significantly impact Byju's financial stability and future operations.

Investor Concerns:

• Accusations from prominent investors raise concerns about corporate governance and transparency within Byju's management.

• Investor confidence may be affected by these allegations, potentially impacting Byju's ability to secure future funding or partnerships.

Impact on Employees:

• The uncertainty surrounding salary payments and financial stability can affect employee morale and job security.

• Employees may face increased stress and anxiety due to the ongoing financial challenges faced by Byju's.