Nexo ends talks over Vauld acquisition

After six months of discussions, the deal by the crypto-lending platform Nexo to acquire its rival Vauld collapsed. The Block reports.

Vauld CEO Darshan Bathija said that “the negotiations, unfortunately, did not end successfully.”

The parties had been discussing the takeover since July, when Vauld suspended operations and announced a possible restructuring of the business.

After signing a preliminary agreement, Nexo twice extended the deadlines for taking a final decision.

“We were seeking a mutual agreement with Nexo to terminate the existing exclusivity agreements, and we continue our engagement with the fund managers included in the final list, in the development of a viable strategy that would best serve creditors’ interests,” Bathija explained.

Sources said there were several reasons why the potential deal did not proceed. They cited:

• Vauld’s losses from the Terra ecosystem crash;
• seizure of assets by Indian authorities;
• frozen funds at the bankrupt FTX;
• the outstanding debt to Amber Group.

Another factor was the significant share of the platform’s clients from the United States. In early December, Nexo announced its exit from the U.S. market.

Vauld clarified that they had not reached an agreement with the buyer regarding the process of reimbursing creditors. The company also said that Nexo had not provided sufficient transparency regarding its own financial position.

“Nexo did not respond to requests for due diligence, including an assessment of solvency, or other measures that could have been agreed to provide creditors with a higher level of confidence,” according to the publication’s statement.

Following the collapse of the prospective deal with Nexo, Vauld is weighing a new restructuring plan. It involves bringing in an external fund-manager to run the process. The company has drawn up a short list of two candidates from an initial six.

“We are in the process of developing proposed strategies and authorities, consulting with creditors to agree terms with the final fund-manager candidate included in the final list, in the new year,” the statement said.

Vauld acknowledged a $98 million hole in its balance sheet, largely attributable to $8.8 million in losses from FTX and impairment of the platform’s tokens.

In November, Vauld secured an extension of creditor protection until January 20, 2023. According to The Block, the firm filed a petition for further postponement of deadlines.

The platform owed creditors $402 million after the suspension of operations, according to the publication.

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