Zipmex sues investor, proposes new scheme after US$100 million deal fails

SINGAPORE-BASED crypto company Zipmex has taken legal action against its Thai investor, V Ventures, for allegedly backing out of a US$100 million rescue deal.

The deal would have resulted in Zipmex’s creditors, totalling more than 70,000, recovering all their funds.

With the plan now unlikely to succeed, the company has proposed a new scheme of arrangement.

Under the scheme, each unsecured creditor of Zipmex Asia and its Singapore subsidiary Zipmex Pte Ltd is expected to get a return on their debt of up to 5.13 per cent, denominated in stablecoin USDC.

If the entities are forced to liquidate, creditors are expected to receive a maximum of 1.64 per cent of their debt, indicated an analysis by advisory firm KordaMentha.

Zipmex sank into distress last year after a US$53 million exposure to failed crypto lenders Babel Finance and Celsius.

Last Friday (Jun 30), the company was granted a six-week extension of its debt moratorium by the Singapore High Court.

In his affidavit, Zipmex CEO Marcus Lim appealed to the court for more time to garner support for a managed wind-down of the company, as opposed to a liquidation.

A key part of the managed wind-down involves selling Zipmex Indonesia and Zipmex Thailand, which collectively constitute about 90 per cent of the group’s customer base.

Zipmex Thailand is undergoing due diligence by a prospective buyer, while potential buyers are being sought for Zipmex Indonesia.

Lim noted that if the investor – who was not named in court documents but is understood by The Business Times to be V Ventures – commenced winding-up proceedings against Zipmex upon the moratorium’s lapse, the insolvency of the parent company may result in Zipmex Thailand and Zipmex Indonesia’s crypto exchange licences being suspended or revoked.

The shares of both entities will hence lose all their value, Lim said, scuppering potential buyouts.

V Ventures has a super-priority claim on the assets of both subsidiaries, granted by the court last December after it emerged as a white knight for Zipmex.

V Ventures was founded by Chalermchai Mahagitsiri, son of Thai coffee king and billionaire Prayudh Mahagitsiri.

The venture capital firm is a unit of Thoresen Thai Agencies, a Thailand-listed investment holding company with businesses in shipping, offshore services and agrochemicals.

V Ventures in April demanded a clawback of US$4.6 million that it already invested in Zipmex, a letter from V Ventures to Zipmex indicated.

The VC firm accused the company of not fulfilling certain conditions for the funds by the deal’s long stop date of Mar 31, according to the letter seen by BT.

Zipmex’s legal case with V Ventures is undergoing arbitration at the Singapore International Arbitration Centre.

“The group recognises and thanks the court for its continued indulgence and patience in the group’s restructuring,” said Lim in his affidavit. “Sadly, a deal which seemed so promising simply couldn’t be carried over the line at the final hurdle.”