Byju’s Tuition Centres, or BTCs, were seen as the primary growth engine for the company, which had been expanding the vertical until early 2023….reports Asian Lite News
Embattled edtech company Byju’s is reportedly planning to shut down about 200 offline tuition centres out of its 300 centres across the country as part of its latest cost-cutting move.
The company intends to leave the centres starting next month. This comes after the company closed 50 centres in February.
The CapTable was the first to report the development.
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Byju’s Tuition Centres, or BTCs, were seen as the primary growth engine for the company, which had been expanding the vertical until early 2023.
When reached, the edtech company did not immediately comment.
Last week, Byju’s mandated all its employees to work from home as it gives up office spaces across the country amid several cash crunch. It barred those working at its 300 offline tuition centres.
People close to the development told IANS, that the company has given up office spaces as the leases expired, keeping only its Bengaluru-based headquarters.
The move to give up offices was part of Byju’s India CEO Arjun Mohan’s restructuring exercise to save cash as proceeds from the rights issue (around $250-$300 million) remain stuck amid its tussle with select investors.
Meanwhile, Byju’s has disbursed a portion of the pending salaries for over 20,000 employees for the month of February.
“We processed part salaries for everyone for February, late night on Friday to the extent of capital we could get outside the rights issue. The company will pay the balance once the rights issue funds are available, which we expect shortly,” the company said in a letter to employees.
Earlier, the steering committee representing term-loan lenders of Byju’s $1.2 billion loan on Friday said that a US judge has ordered to prohibit further movement or use of $533 million by the edtech company, which is owed to lenders.
According to the steering committee’s statement, the company’s co-founders Byju Raveendran and Divya Gokulnath are prohibited by the judge from further transferring or using any of the $533 million in loan proceeds previously held by Camshaft Capital Fund, and subsequently transferred to an unnamed and unknown offshore trust.
The court also found that Raveendran and Gokulnath “are working in concert with the defendants and ordered them to comply with its ruling”.
In its ruling, the court confirmed that the transfer of funds from Byju’s Alpha, the edtech firm’s US subsidiary, and their continued concealment, “likely constitutes a fraudulent conveyance”.
“The fact that the parent company is attempting to hide where the assets are is huge. It shows that they are engaged in what appears to be a potential fraud,” the judge said in its order.
“Raveendran… either was being untruthful or he’s the most incompetent officer or director of a company in Delaware history.”
Additionally, the court ordered the arrest of William Morton, the founder of Camshaft Capital Fund, following his repeated refusal to appear in court and provide any of the requested information regarding the transfers of the $533 million in loan proceeds and the current status and location of the funds.
The ruling confirms that “Byju Raveendran himself is acting in concert with, among others, his brother, Riju, his wife, Divya, and fugitive William Morton, and that these individuals are continuing to intentionally defraud Byju’s lenders,” claimed the lenders’ steering committee.
The court-ordered freezing of assets is “an important step towards recovering the missing $533 million, and we will take all necessary legal actions to recover what we are rightfully owed”.
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