Prosus marks $493 mn loss in Byju’s, writes off stake

The investment firm has invested over $500 million in the edtech firm, and this write off comes at a time when the edtech firm has been struggling with various challenges.
Byju’s
Byju’s

BENGALURU: Investment firm Prosus on Monday said it has written off its 9.6% stake in Byju’s. In its FY24 annual report, the Naspers-owned firm said a fair value loss of $493 million was recognised in other comprehensive income in the current year.

In a statement, Prosus said, “We impaired Byju’s mark down to zero at the end of FY24. The fair value written down was $493 mn for FY24. We have written down Byju’s because we have inadequate information on Byju’s financial health, liabilities, and future outlook.”

The investment firm has invested over $500 million in the edtech firm, and this write off comes at a time when the edtech firm has been struggling with various challenges including the ongoing legal troubles.

Recently, in a note financial firm HSBC assigned zero value to Prosus’ 9.6% stake in Byju’s. It said, “We assign zero value to Byju’s stake amid multiple legal cases and funding crunch.” It added in the note, “Previously, we valued around 10% stake in Byju’s by applying an 80% discount to the latest publicly disclosed valuation.”

The edtech firm was once valued at $22 billion, and in November last year, Prosus had marked down the firm’s valuation to less than $3 billion. In January this year, US-based asset manager BlackRock slashed Byju’s valuation to $1 billion as of October 2023.

Investors including Prosus and General Atlantic, holders of over 60% of the cap table, recently voted in favour of change in leadership of the company and they filed an oppression and mismanagement suit against Byju Raveendran and management in the NCLT Bengaluru branch.

Last week, Byju’s filed a petition with the Karnataka HC challenging the NCLT order as it prohibits the firm from proceeding with its second rights issue. On June 12, the NCLT had directed Byju’s to maintain status quo in its shareholding.

Earlier this month, the ad hoc group of term loan lenders of Byju’s Alpha Inc. said certain holders of the term loans and GLAS Trust Company LLC (as administrative agent and collateral agent of the term loans) had filed plea pursuant to Chapter 11 of the US Bankruptcy Code to initiate involuntary Chapter 11 proceedings against Epic!, Neuron Fuel (DBA Tynker), and Tangible Play (DBA Osmo), the three US-based guarantors of the term loans in the US Bankruptcy Court.

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