Byju's crisis deepens, founder mortgages house to pay salaries to employees: Report

Byju's crisis has deepened further. According to people familiar with the matter, edtech titan Byju's founder Byju Raveendran has mortgaged his house as well as houses owned by his family members to pay salaries to employees.

Byju company is currently facing cash crunch. To overcome this crisis, Byju Raveendran has even mortgaged his house.

It has decided to mortgage two houses owned by the former billionaire's family in Bengaluru and his under-construction villa in Epsilon to borrow $12 million.

Some people gave this information on the condition of anonymity. He said the startup used the money on Monday to pay salaries to 15,000 employees at Byju's parent company, Think and Learn Pvt.

Byju Raveendran founder is making every possible effort in his fight to keep the company running and reduce its financial pressures. The company, once India's most valuable tech startup, is in the process of selling its US-based children's digital reading platform for about $400 million. It is also locked in a legal battle with creditors over default in interest payments on a $1.2 billion term loan.

According to people, Raveendran, who was once worth about $5 billion, has taken a loan of about $400 million by mortgaging all his shares in the parent company. He also returned $800 million raised through share sales over the years to the company, leaving him short of cash.

Another source said that Byju has called the Annual General Meeting (AGM) on December 20. In this, the properties mortgaged by the promoters will be brought to the notice of the company's board. In this meeting, the financial results for the financial year 2021-22 will also be presented before the shareholders. A source said the company is in the process of presenting a repayment program to the Board of Control for Cricket in India (BCCI) for sponsorship dues of Rs 160 crore. Epic sales have reached an advanced stage. Apart from this, existing investors are also expected to inject new funds.

However, no response was received to an email sent to Byju for comment in this regard. Last month, Manipal Education and Medical Group Chairman Ranjan Pai had taken over the Rs 1,400 crore loan raised by Byju's from Davidson Kempner. Pai-owned fund Arin Capital was the first institutional investor in Byju in 2013.