Facing financial turbulence, edtech giant Byju’s is reportedly contemplating the sale of its unit, Epic, in a deal that could fetch around $400 million. The move is seen as a strategic measure to address the company’s pressing financial issues, according to sources cited in an Economic Times report.
Three offers, collectively valued at approximately $400 million, have been tabled for Byju’s subsidiary, Epic. The current plan involves allocating a substantial portion of the funds to address immediate financial requirements at Think & Learn, Byju’s parent company. The remaining proceeds are expected to be directed toward servicing term loan B (TLB) obligations, with an estimated utilization of $80-100 million.
The urgency of finalizing the Epic sale is highlighted by Byju’s aim to conclude the deal before the holiday season, ensuring a timely infusion of funds before the Christmas and New Year holidays.
A Pledge Amidst Challenges
Recent reports indicate that Byju Raveendran, the founder of Byju’s, has pledged his personal residences, including family-owned homes in Bengaluru and an under-construction villa, to secure funds. The pledged amount, approximately $12 million, was utilized to meet payroll obligations for 15,000 employees at Think & Learn.
This move comes in the wake of a series of challenges for Byju’s, including a show cause notice from the Enforcement Directorate for alleged violations of FEMA rules amounting to ₹9362.35 crores. Additionally, Dutch investor Prosus Ventures marked down Byju’s valuation to below $3 billion, constituting the third such valuation cut.
Byju’s is actively engaging with the Board of Control for Cricket in India (BCCI) to settle an insolvency matter filed against it in the Bengaluru National Company Law Tribunal (NCLT). The case revolves around defaults on sponsorship dues related to the Indian cricket team’s jerseys.
Amidst these challenges, the potential sale of Epic emerges as a strategic move to stabilize Byju’s financial position and navigate through a complex landscape of regulatory scrutiny and financial constraints. The edtech giant continues to grapple with various issues while seeking viable solutions to sustain its operations and strategic initiatives.
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