In a shocking development, the financial firm HSBC has valued the edtech giant Byju's at nil, stating that investment company Prosus' stake of nearly 10 percent in the company has no value. This stake had been valued at nearly $500 million.
"We assign zero value to Byju's stake amid multiple legal cases and funding crunch," HSBC said in a research note.
The firm had earlier valued the Prosus' stake by applying an 80 percent discount to Byju's most recent public valuation.
Byju's, now entangled in financial as well as legal troubles, has been struggling to meet payroll obligations. The head of Prosus had said last year that, "Byju's is facing multiple challenges. We, along with other shareholders, are working daily to improve the situation. "We maintain close communication with the company."
Byju's had in early 2022 announced a public listing through a SPAC, with valuation speculated to be up to $40 billion. However, US investment firm BlackRock reduced the valuation of its holdings in Byju's from $22 billion to $1 billion in January this year. BlackRock holds less than a 1 percent stake in the edtech firm.
Recently, a group of lenders filed a petition in a US court against new entities associated with Byju's US subsidiary, claiming these entities have failed to repay their debts.
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