Five must-read stories on Byju’s crisis this week

Byju’s key investors Peak XV Partners (formerly Sequoia Capital India) and Prosus flagged corporate governance issues at the Byju Raveendran founded startup. In fact, we had an exclusive story on how Peak XV sent a communication to its limited partners (sponsors in the fund) saying it’ll be significantly writing down the value of its investment in Byju’s.

ETtech brings you up to speed with all the latest developments surrounding Byju’s.

Byju’s, lenders agree to alter terms of $1.2 billion loan: Byju’s reached a tentative agreement to rework its loan pact with lenders who collectively own more than 85% of the $1.2 billion Term B loan, ETtech first reported on July 24. A statement issued by the steering committee of ad hoc term loan lenders later confirmed the development.

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“We look forward to completing the loan amendment over the next two weeks and are committed to doing our part to deliver on our agreed upon timeline,” the statement read.

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Discover the stories of your interest

Significant valuation markdown coming for Byju’s: One of Byju’s key shareholders, Peak XV (formerly Sequoia Capital India) wrote to its limited partners (LPs are sponsors in investment funds) last week, that it would mark down the value of its holding. “The marking down of our investments reflects our lack of visibility into Byju’s up-to-date audited financials and our inability to influence (it) to take corrective measures,” the investor wrote in the letter.

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Prosus cites poor corporate governance for board exit: Breaking the silence over its representative’s resignation from the board of Byju’s, Prosus, which holds less than 10% of Byju’s total stake, said the decision to exit was taken after it became clear that the executive leadership at the edtech firm regularly “disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters”.

ET first reported on June 22 that board members representing investors Prosus, Peak XV Partners and the Chan Zuckerberg Initiative had resigned from the board.

Byju’s vacates offices across Delhi NCR, Bengaluru: In a bid to further cut costs, Byju’s shuttered some of its offices in Gurugram and Bengaluru, with multiple rounds of layoffs. The firm is also in the process of shutting down an office in Noida with a significant number of the location’s employees being laid off. ETtech visited the vacated premises at Gurugram and spoke to employees and vendors of adjacent establishments, who confirmed the development.

Byju’s remits remaining PF contribution for employees after delay: Byju’s has remitted its (employer’s) share to employees’ provident fund corpus for all its staff for the month of June after initially delaying that contribution for most employees.

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Employees’ Provident Fund Organisation (EPFO) data, accessed by ETtech, showed that Byju’s had made payments worth Rs 14.6 lakh in the names of only 738 employees for June as against 24,818 employees for the month of May.