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Zipmex’s rescue plan could face significant challenges as the crypto exchange‘s investor is now asking to pay a fraction of its debt, deviating from the pledge to make a 100% payment.
The distressed company is simultaneously planning to further extend its creditor protection period to seek out new investors.
Buyout Proposal for Zipmex Takes a New Turn
Zipmex’s investor is proposing to pay the Thai crypto exchange’s creditors approximately 10% to 20% of the amount owed to them, according to a letter the firm submitted to the court overseeing its restructuring. This new proposal marks a significant departure from the original buyout plan, which promised full payment to creditors.
The letter, as reported by Bloomberg, stated that the investor sought to slash the payment to creditors because Zipmex failed to meet the conditions outlined in the initial buyout proposal. While the letter did not name the investor, an anonymous source revealed that the unnamed entity was venture capital fund V Ventures.
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As previously reported, V Ventures signed a deal with Zipmex in December 2022 to acquire 90% of the troubled crypto exchange for $100 million in cash and crypto tokens. The crypto portion of the payment was intended to be used to gradually unlock customers’ frozen wallets by April 2023.
However, Zipmex did not receive the fourth tranche of the payment from its investor, which was due on March 23, 2023, and was valued at $1.25 million. This payment was meant to fund working capital.
In July 2022, Zipmex, which has branches in Thailand, Singapore, Indonesia, and Australia, halted withdrawals on its platform following its exposure to troubled crypto lenders Celsius and Babel Finance, amounting to $53 million. Shortly thereafter, Zipmex sought bankruptcy protection from creditors and was granted a three-month creditor protection period by the Singapore High Court in August 2022, enabling it to propose a debt restructuring plan.
Zipmex’s Plans to Further Extend Creditor Protection Window
Meanwhile, Zipmex’s latest creditor protection period is set to expire in a few days on April 23. With the latest developments from its investor, the crypto exchange intends to ask the court for another extension to allow time to seek alternative investors, as stated in the letter.
Amid Zipmex’s troubles, the Thai Securities and Exchange Commission (SEC) reportedly began an investigation into the firm’s activities to determine if the crypto exchange had violated any local laws.
