By George Ward
Yesterday, Vauld CEO Darshan Bathija informed the company’s creditors that the proposed agreement with Nexo had been scrapped. However, in a contrasting twist of events, Nexo told the Vauld creditors via an open letter that the deal was still ongoing.
The open letter, dated Monday, December 26, contains some revisions to Nexo’s earlier proposal from earlier this month and its final proposal to Vauld. The open letter further asserts that when Nexo’s prior proposal was made to Vauld’s creditors, Kroll, Vauld’s financial advisor, misrepresented and manipulated it.
Given that the potential Nexo deal had fallen through, Vauld intends to pursue the fund management option for its restructuring. Vauld has chosen one of the six likely fund managers it has identified, according to a top-level executive of the firm.
Nexo contends in its open letter that the fund management option is terrible for creditors. In the letter, reference was made to Vauld’s Creditors.
Nexo proposes a fixed-income arrangement between Nexo and Vauld’s Creditors, wherein Nexo is responsible for generating the loan revenue to pay the fixed interest owed to the creditors. However, the creditors will be accountable for giving their remaining assets to someone who will manage their accounts and have to pay for such service.
Nexo’s Last Proposal
Nexo’s final proposal differs slightly from the one it initially presented earlier this month, which Vauld’s governing board rejected. Hence, Nexo has confidence that the governing council will approve the final proposal.
Regarding withdrawals, the final proposal has undergone a significant change. It specifically relates to withdrawal-related key performance indicators or KPIs.
In the past, cash withdrawals required a minimum trading turnover of $10,000 or a turnover of at least twice the account balance. These KPIs are now at least five times the account balance in turnover, with no minimum turnover requirement.
As of the final proposal, there is no longer an absolute minimum deposit amount. The majority of the other terms in the two proposals are unchanged.
It will be interesting to see if the Vauld creditors accept Nexo’s last offer. Last month, Vauld received another extension for its credit protection, giving the company until January 20 to fix its financial issues.
However, as was previously reported, the firm has asked for yet another postponement. The moratorium hearing is scheduled for January 17.
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