Nexo Once Offered To Rescue BlockFi For $850 Million

Nexo once offered to bail out BlockFi for $ 850 million right when the company was in crisis because of Three Arrows Capital.

Earlier this year, lending platform Nexo made an offer of $850 million to rescue BlockFi from a crisis associated with Three Arrows Capital (3AC), according to a document obtained by The Block.

To better understand BlockFi’s June status, please review the following series of articles:

• June 21: BlockFi borrows $250 million from FTX;
• June 25: Investment funds raise capital to avoid the word “agreement” with FTX;
• June 30: Revelations about the deal with FTX and the number of loans has lent to 3AC;
• July 2nd: The firm confirmed to borrow $400 million from FTX. US, including a deal to acquire BlockFi for $240 million.

At the time, the firm ignored Nexo’s offer of help and chose to close a deal with FTX.US, which also filed for bankruptcy protection last week with sister company Alameda Research.

Specifically, Nexo offered a deal worth a total of about $850 million, including:

• $30 million representing 51% of BlockFi shares, in cash and equity;
• $30 million paid to existing shareholders upon successful registration of profit product S1 with the US Securities and Exchange Commission;
• $500 million credit line to solve liquidity problem.

In addition, Nexo has a 5-year call option on the remaining 49% of BlockFi’s equity, at a valuation of 10 times the proposed, and termination of BlockFi’s uninvested employee options pool. This provision alone was worth $288 million in total.

Nexo is also willing to work with others, including FTX.US, according to an email Antoni Trenchev, co-founder of Nexo, asserts:

“I confirm that we brought BlockFi a deal over the summer. It was a better solution than FTX’s proposal, but its management chose to go with FTX. Their choice of a bad deal that makes no economic sense has left us confused and concerned about conflicts of interest.”

Trenchev added that if BlockFi had accepted Nexo’s old offer, they might not have been in their current situation.The firm has halted withdrawals due to significant exposure to FTX and is preparing to file for Chapter 11 bankruptcy protection, despite insisting two days ago that it was fine.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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