Financially struggling edtech giant Byju’s has reduced its office space in Bengaluru, leaving a 400,000 sq ft property at Prestige Tech Park in an attempt to cut costs. The lease was terminated earlier this year, with the deposit being used to offset rental arrears. The company is also dealing with disputes with other landlords, The Economic Times reported citing sources.
Byju’s, operated by Think and Learn, had been paying around Rs 4 crore per month for the office space, having signed the lease with Prestige Group around 3.5 years ago. In addition, Kalyani Developers has issued a legal notice to Byju’s for failing to pay rent for a 500,000 sq ft office space at Kalyani Tech Park, Bengaluru, which is under a lock-in period until March 2025.
“So far, the total due to the builder (Kalyani Developers) is ten months, of which they adjusted seven months’ rent with the deposit,” a person aware of the matter told the news outlet.
The total amount owed to Kalyani Developers is ten months’ rent, seven months of which have been offset with the deposit, a source revealed. Between 2022 and 2023, Byju’s vacated a 400,000 sq ft office at IBC Knowledge Park and relocated operations from Kalyani Tech Park.
“Byju’s continues to hold the assets, but no one operates from here,” one of the sources said.
The company still owns these properties, but they are no longer in use. Juggy Marwaha, CEO of Prestige Office Ventures, confirmed the termination of the lease in January, noting that the company had tried to adjust rents and provide some leniency, but ultimately had to request the space back after payments were not made.
The development comes as Byju’s parent company Think and Learn received a commitment of $300 million from investors for its ongoing rights issue which will close by February-end. In January, Byju’s floated a rights issue to raise $200 million through equity rights issue at a valuation of $220-250 million, a 99 per cent reduction from $22 billion.
The edtech firm has offered investors to appoint two independent directors to enhance transparency but only after the rights issue is over and it has declared its financial results for the 2023 fiscal, news agency PTI reported citing a source aware of the matter. The source added that the negotiation is also on with upset investors for their participation in the rights issue.
Source: Business Today
