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Odaily Translator | Nian Yin Si Tang

Summary:

Summary:

- Embattled cryptocurrency lender Vauld rejects rival Nexo's final takeover proposal.

- Vauld is still seeking answers from Nexo, especially in terms of its solvency.

- Nexo fired back at Vauld on Thursday, saying its chief executive was not thinking of the best interests of creditors.

Embattled cryptocurrency lender Vauld and its committee of creditors (COC) have rejected rival Nexo's "final" takeover proposal, citing concerns over Nexo's financial health and other issues.

"We have considered the terms of the final Nexo proposal and have engaged in further consultations with the COC, and we unanimously do not accept your proposal," Vauld co-founder and CEO Darshan Bathija wrote to Nexo on Wednesday .In an open letter dated December 26, Nexo addressed Vauld's creditorspropose

this proposal. The letter was sent the same day that Bathija said in an email to Vauld creditors that the potential Nexo deal had been called off. But Nexo said it hasn't given up trying to strike a deal with Vauld.

"Overall, we have repeatedly requested (consistent with COC requests) that comprehensive due diligence be undertaken, including an assessment of Nexo's solvency, or detailing what could be done to provide Vauld's creditors with greater maximum assurance," Bathija said in the letter.

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"Iron Evidence" Needed

One Vauld creditor, speaking on condition of anonymity, told The Block that they “want to get solid evidence that Nexo is solvent so we don’t end up in another bankruptcy crisis.”

They further stated that "there is too much uncertainty for U.S. creditors, who account for 45% of the company's assets under management, have no protection if Nexo goes bankrupt, and Nexo has not yet provided us with their financial model, to give us a reasonable estimate of vulnerability reduction."

Vauld gave Nexo until Friday to respond to its concerns. In the letter, Bathija said: "Since these requests are not new to you, we hope that you will show sincerity in this proposal by giving us provide satisfactory answers to inquiries."

"Nexo will be hosting a live AMA session in the middle of next week to address all outstanding questions about our proposal. We firmly believe that this is the proposal that will create the most value for Vauld's clients." Kalin Metodiev, Nexo Co-Founder and Managing Partner Telling The Block, “Unlike most companies in the space, Nexo has verified through a third party that our assets exceed our liabilities through real-time certification since mid-2021.”Vauld and Nexo have been discussing a potential deal since early July last year.. At the time, after facing a severe liquidity crunch, VauldpausepauseCustomer withdrawal. Vauld is currently。

More than $400 million owed to creditors

The company has until Jan. 20 to sort out its financial troubles, and was granted another credit protection extension last November. However, Vauld has applied again for an extension, and an extension hearing is set for Jan. 17. Whether the company will be granted another extension remains to be seen.

Regarding the rejection of the final acquisition proposal by Vauld, Nexo responded that Vauld CEO Darshan Bathija did not consider the best interests of creditors.

Given the firm's lack of interest in a potential Nexo deal, Vauld has been planning to pursue a restructuring through fund managers and has identified six potential candidates.

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Best Proposal?

“The competitor is an unknown fund manager with no track record, no track record, and nothing but unproven, exaggerated promises of very high annual returns regardless of market conditions,” Nexo said in a letter. “Because this proposal is so shaky, many believe that those who voted for it must be part of this secret deal that benefits former management and a select few whale clients,” Zhong said.

Nexo said it stood by its view that its final takeover proposal was the best for Vauld's creditors.

Vauld and Nexo have been negotiating a potential deal since early July. At the time, Vauld suspended client withdrawals after facing a severe liquidity crunch. Vauld owes more than $400 million to creditors.

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termination fee

In response to the concerns raised by Vauld, Nexo responded that since 2021, the company has been publishing asset and liability information in real time. The company said it would have to pay Vauld $20 million if it walks away from the deal.

"Nexo's acquisition of Vauld had an exclusivity period - in order to successfully complete the acquisition of Vauld, Nexo had to hire different consultants and invest a lot of time, money and effort, which caused Nexo to accrue material costs," the company said, "while We are reluctant to enforce the $20 million spin-off clause given to Nexo by Vauld as this would further reduce the assets available to creditors, but Nexo must make up for losses incurred due to the breach by Darshan Bathija and his group."