Byju’s forms working group with top investors Prosus, Peak XV and others for restructuring and asset sale coordination

In an effort to improve the relationship with its key stakeholders and enhance coordination surrounding its ongoing restructuring initiatives and divestments, the beleaguered edtech company Byju’s has established a working group comprising its founders and top investors, according to people in the know. 

The working group includes investors Prosus, Peak XV Partners (formerly Sequoia), General Atlantic, Sofina, and the Chan Zuckerberg Initiative. The group was formed based on the guidance of the Board Advisory Committee (BAC), which includes former Infosys CFO TV Mohandas Pai and former State Bank of India chairman Rajnish Kumar. The BAC provides mentorship and advice to the Byju’s team, including CEO Byju Raveendran. 

Byju’s promoters have been accused of creating a communication blockade with investors, which was cited as one of the reason board members resigned in June. The company’s relationship with its stakeholders hit a low when three board members—GV Ravishankar of Peak XV, Vivian Wu of Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus—stepped down from the board. Both Prosus and Peak XV called out the governance practices of the company as the reason for quitting.  

“One of the complaints was that Byju was not engaging with investors. This (formation of working group) is something that Pai and Kumar have suggested. It is a working group, not like an advisory council. The group will have regular interactions, and promoters will keep them informed about progress of the restructuring and the other important corporate level developments,” said one of the people aware of the developments at the company. 

The company’s promoters and current members of the board—Byju Raveendran, wife Divya Gokulnath, and brother Riju Ravindran—will keep the working group informed of the progress on the sale of Great Learning and Epic, debt settlement with Davidson Kempner and the $1.2-billion Term-Loan B (TLB), the dispute resolution with Aakash promoters on share swap and the conversations around its new funding round. 

The formation of working group follows the company’s move to place two of its group firms—higher education platform Great Learning and US-based kids-focused digital reading platform Epic—on sale to raise funds immediately to meet the repayment obligations towards the TLB. The company hopes to gain close to a billion dollars from these divestments.  

Last week, BT reported that founders of Great Learning are in early discussions to buy the company back from Byju’s.  

According to sources, Byju’s will first divest Epic, the company it acquired in a $500 million cash and equity deal in July 2021. While the company has identified potential suitors for Epic, it is awaiting a response from the TLB lenders on the repayment proposal it has put forth. The proceeds from a potential sale of EPIC will go towards repaying the first tranche of $300 million if the amendment proposal is accepted. 

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