Prosus writes off $493-m investment in Byju’s

The Dutch-listed technology investment firm Prosus, has written off its stake, in embattled edtech firm, BYJU’S.

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In its annual report, Prosus, which holds nearly 10 per cent stake in the firm, said that it wrote off the fair value of its stake, due to ‘significant decrease in value, for equity investors.’

“A fair value loss of $493 million, was recognised in other comprehensive income in the current year,” it said.

This comes at a time when Prosus, and other BYJU’S investors, like Peak XV, General Atlantic, and others, have mounted legal challenges, against the company’s management.

BYJU’S challenges

Prosus is also fighting a legal battle with BYJU’S, in Karnataka High Court, after the edtech firm, filed a petition dragging a group of investors on an extraordinary general meeting, seeking CEO Raveendran’s removal from the company.

Prosus has filed a case against raising $200 million, in a rights issue at a 99 per cent cut, to its last valuation of $22 billion. However, the National Company Law Tribunal (NCLT), has ordered the company, not to use the cash from the rights issue, until the matter is decided in court.

In H1, Prosus had marked down the valuation of BYJU’S to less than $3 billion, representing an 86 per cent decline, from the previous funding round valuation of $22 billion.

Recently, the Bengaluru bench of the National Company Law Tribunal (NCLT), has prohibited the edtech major, from proceeding with its second rights issue. The NCLT, in an order dated June 12, had directed BYJU’S to maintain status quo in its shareholding, effectively pausing its contentious rights issue.

The order restrained Byju’s from using the proceeds of the second rights issue, which, according to the investors, commenced on May 13, and was to end on June 13, and, the same is to be deposited in a separate account, till the disposal of the main petition.

Further, BYJU’S must file the complete details of the allotment made on March 2, before the increase of authorised share capital. This must include information such as the name of the shareholder, equity shares held on January 27, entitlement as per rights offer, and equity shares, allotted on March 23; and also equity shares allotted after the increase in authorised share capital, the order noted.

• Also read:Byju’s offers dissenting investors another opportunity to participate in rights issue

The order was passed with regard to an ‘oppression, and mismanagement’ application, filed by the investors of the company, such as Peak XV Partners, General Atlantic, Sofina, and Prosus.

The cash-strapped edtech firm, has filed a petition with the Karnataka High Court challenging the NCLT order. The matter is listed for hearing on Monday.