Byju’s preparing to set up advisory committee amid growing concerns

Indian Ed-Tech startup Byju’s will set up a Board Advisory Committee (BAC) to guide the company on the composition of board and governance structure suitable for Byju’s scale, size, and  performance  aspirations, announced by Byju’s founder, Raveendran, in extraordinary general meeting (EGM)  on July 4, which came after the resignation of three directors of Byju’s board and the departure of Deloitte as the company’s auditor.

In addition to the aforementioned developments, the Ed-Tech company has provided an update to its shareholders regarding ongoing negotiations with lenders concerning the restructuring of its $1.2 billion term loan. The company has expressed optimism and stated its expectation of a favorable outcome resulting from these negotiations to reach a mutually beneficial agreement that will support its long-term financial stability and growth.

According to reliable sources cited by Business Standard, the establishment of the Board Advisory Committee (BAC) announced by the Ed-Tech company will comprise independent directors from diverse corporate sectors, each with notable backgrounds and relevant expertise. Its primary responsibility will be to provide guidance and direction to the CEO on matters pertaining to the composition of the board and the implementation of an appropriate governance structure that aligns with the scale, size, and ambitious performance goals of Byju’s.

Byju’s has faced a recent surge of negative attention, with the company making headlines for all the wrong reasons. Just last month, the company implemented a cost-cutting strategy that resulted in the layoffs of approximately 1,000 employees across various departments. This move was aimed at streamlining operations; however, it marked a significant increase in the total number of job cuts, which now stands at around 3,500.

These recent layoffs come at a crucial juncture for the company, as it is already entangled in legal disputes with lenders in the U.S. Court. Additionally, Byju is facing the daunting task of making a $40 million interest payment on its $1.2 billion loans.

These challenges further underscore the critical nature of the company’s current situation and the need for careful consideration and decisive actions to navigate these complex circumstances successfully.