Embattled digital asset exchange Zipmex is in talks with several potential investors to prevent liquidation after “an investor” signalled it is pulling back from a $100 million buyout deal.
Singapore’s Blue Square Capital is among the investors that have expressed an interest in injecting cash into the firm, according to a court hearing on Friday morning. DealStreetAsia understands that Blue Square Capital, also known as BSQ Capital, is a digital- and blockchain-focused investment management firm, which was set up last year.
Zipmex, which is based in Thailand and Singapore, has also been in talks with a Bangkok-listed company, which shows the most potential among the five investors that the startup has been in talks with, it said in a court filing on Thursday. However, the deal had been prolonged due to the recent Songkran (New Year) holidays in Thailand.
While Zipmex did not name the investor that is backing out from the buyout deal agreed in December last year, V Ventures, the VC arm of Bangkok-listed Thoresen Thai Agencies, had earlier mentioned that the digital asset exchange is not “fulfilling certain conditions required for the latest tranche of investment from the firm”, according to media reports.
The investor is seeking approval from the Singapore court to make a 10-20% repayment of Zipmex’s total debt instead of repaying in full, as formerly agreed upon, Bloomberg had reported earlier this month.
The court document stated that the CEO of Zipmex’s Thai unit, Akalarp Yimwilai and Marcus Lim, CEO and founder of the firm, have been trying to convince its investor to complete the tranche payment under the original terms but “there is a real possibility that the investor will now not complete the scheme of arrangement.” That’s why the startup is seeking to buy time to either receive a payment from its former investors or sign a letter of intent or termsheets with another replacement investor.
Court approves moratorium extension
Zipmex’s request for another two-month moratorium extension on debt repayment, which was submitted on Tuesday, was approved by the Singapore court Friday morning, making its new deadline June 20, 2023. Justice Aedit Abdullah, who oversees the case, emphasised in the court that he cannot “continue to extend the moratorium indefinitely and something concrete has to come out of the extension”.
The startup was also instructed by Abdullah to be more interactive on its social media platforms, which have gone quiet during the past two weeks, to keep its creditors informed about the moratorium.
In a letter seen by DealStreetAsia, Zipmex’s legal representative Morgan Lewis Stamford has informed Rajah & Tann Singapore, which represents Zipmex’s investor, that the digital asset exchange will seek compensation if the investment tranche is missed. Zipmex argued that there were other interested investors who were rejected in favour of the said investor.
Zipmex fell victim to the market downturn in the crypto sector last year when its lenders Babel Finance and Celsius faced a liquidity crisis. Trading activity on its platform Z Wallet remains halted.