The $100 million acquisition of Zipmex hit a stumbling block yesterday after Ventures missed a $1.25 million payment.
The imminent acquisition of Thai cryptocurrency exchange Zipmex is at risk of falling through after the buyer defaulted on a $1.25 million payment. according to Bloomberg reportThis amount was due yesterday and is needed to fund working capital. In a letter, Zipmex revealed that it will begin liquidation proceedings for its technology unit, Zipmex Technology Co. Unless you receive the required payment. The beleaguered cryptocurrency exchange also plans to suspend payroll for this division.
The Zipmex acquisition payment is intended to inject liquidity into the company
The March 23 payment was supposed to be the latest money transfer under the $100m venture capital buyout. Zipmex had agreed to be acquired by Thoresen Thai Agencies Pcl, a subsidiary of Ventures, late last year. At the time, the Asian stock exchange was going through a liquidity crisis after suffering the cryptocurrency bear market in 2022.
Prior to defaulting on the Zipmex acquisition, the exchange had received three tranches of funding. However, Zipmex does not consider the payment issue an immediate hindrance. According to the struggling company, it still has the cash to pay salaries. Moreover, the exchange also indicated that it is working with advisors on the next steps. However, Zipmex has not specified whether or not the latest payment will materialize, as the company has not yet received a final indication.
Zipmex declined to provide further information about the payment issue. CEO Marcus Lim said the company is “committed to confidentiality”.
Zipmex’s Financial Problems and Subsequent Sale
Zipmex’s 2022 liquidity crunch was due to the collapse of Terra and stable algorithm UST last summer. At the time, the Asian cryptocurrency exchange issued loans to crypto-focused platforms Celsius Network and Babel Finance, which were not repaid. The failed repayment of the loan by Babel and Celsius was approximately $53 million.
Last July, Zipmex suspended withdrawals after beleaguered crypto payment facilitators. In August, the cryptocurrency exchange commissioned a restructuring firm to help with its recovery plan after filing for creditor protection.
In early November, it was reported that Zipmex was in advanced talks with Ventures for a $100 million acquisition. Furthermore, reports claimed that Ventures will pay $30 million in cash, and the rest in unspecified digital assets.
According to speculation in late 2022, Zipmex founder Chalermchai Mahagitsiri spoke with two investors about a potential deal. However, the company has not confirmed or denied these speculations, instead issuing a statement that read:
“Thank you for your interest in our efforts to make our clients complete. With conversations reaching a critical and sensitive stage with our potential investor, I cannot comment because all parties are subject to a non-disclosure agreement, and we do not want to jeopardize the transaction. We will update you as soon as possible.”
The acquisition eventually took place in December, with Zipmex looking to direct the proceeds toward unlocking customer funds. In a court filing, the company revealed plans to settle the clients by April 2023.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify cryptocurrency stories down to the bare essentials so that anyone anywhere can understand without much background knowledge. When not deep into cryptocurrency stories, Tolo enjoys music, loves to sing, and is a movie lover.