Crypto banking platform Celsius has received 30 bids from 125 potential buyers to purchase its assets in the retail and mining business. If approved by court, the now bankrupt crypto lender can hold an auction in January to sell off assets and repay its creditors including customers.
Bankrupt crypto lender Celsius Network LLC has received potential bids for its assets in the retail and crypto mining business, according to a presentation delivered by the company at the U.S Bankruptcy Court for the Southern District of New York on Tuesday. More than 125 parties have shown interest in the assets and have contacted Celsius, with 30 bidders executing non-disclosure agreements – which is a legal contract used to protect sensitive information about a company or the bidding terms during negotiation.
“The Debtors received multiple bids proposing a range of potential transaction and business structures to acquire the retail platform and provide value to the Debtors’ estates. The Debtors also received a number of single asset bids,” said Celsius in its document presented at court.
The proposed transaction process included the acquirer migrating Celsius’ assets and customers accounts to their platform and ensuring that clients receive a percentage of their funds back as promised by the lender. According to the documents, the deadline for receiving bids and potential buyers making a good faith deposit for the assets was on December 12, 2022. Judge Glenn, who is hearing the case, has allowed Celsius to move forward with the auction for its assets which is set to take place on January 10, 2023, after being pushed back from the original date of December 15, 2022.
Lawyer Chris Koenig, representing Celsius, did not disclose terms of the agreement and notified the court that company advisers have not yet decided whether they will be selling the company as a whole, in shares or if they are pursuing a different restructuring plan. However, Celsius has confirmed that they will be working with bidders in the coming weeks to improve existing proposals before announcing whether the sale will occur.
The document notes that as of November 25, Celsius held $2.6 Billion (£2.13bn) worth of crypto assets in its balance sheet, which includes over $1 billion (£800mn) in ETH and stETH (staked ETH) and approximately $630 million (£517mn) in BTC and WBTC (wrapped BTC). The company’s equity hole – the value between its assets (crypto and non-crypto) and total debts – is approximately $1.2 billion (£980mn). CEO Chris Ferraro said in court that the company’s crypto mining business is operating successfully. Having generated positive cash flow every month of this year, the division continues to deploy more mining rigs.
Celsius declared bankruptcy and filed for Chapter 11 protection in July after facing a liquidity crisis following its exposure to collapsed cryptocurrency project Terra/Luna and crypto hedge fund Three Arrows Capital (3AC). At the time, the lender held $4.7 billion (£3.86bn) worth of crypto assets under custody.
In September, the lender filed a motion in court asking permission to reopen fund withdrawals for a minority of its customers. The motion was approved by Judge Glenn on December 7, who ordered the company to return $44 million (£36mn) worth of crypto assets back to customers that were held within its Custody and Withhold accounts. However, only customers with balances lower than $7,575 (£6,217) on the platform and those that transferred their funds from Earn or Borrow programs into Custody accounts within 90 days of Celsius filing for bankruptcy were eligible, while clients who deposited their funds in Celsius’ crypto Lending and Borrowing accounts did not qualify.
The Bankruptcy Court also approved another motion made by the company in October that allowed it to set aside $2.8 million (£2.3mn) for Key Employee Retention Program (KERP), enabling the ex-crypto lender maintain a few trained employees to help it continue operations in a limited format while financial restructuring processes under the Chapter 11 continued.
At the time of writing, CEL is trading at $0.52 – up by 3.5% in the last 24-hours.
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