Genesis Reaches Agreement in Principle with DCG and Key Creditors, Gemini contributes $100 million for its Gemini Earn users
Genesis Global Holdco, LLC (“Genesis”) has reached an agreement in principle with Digital Currency Group Inc. (“DCG”) and several of its key creditors on a global resolution. This agreement will optimize outcomes for Genesis’ clients, stakeholders, and related parties.
The agreement in principle includes participation from DCG, Genesis’ other creditors, and a committed capital facility from a consortium of financial institutions with Genesis’ creditors. The agreement is expected to significantly reduce the company’s debt and provide the company with greater financial flexibility as it moves forward.
The agreement will see crypto exchange Gemini contribute $100 million for its Gemini Earn users who have funds frozen with the bankrupt firm. Pending the closing of these transactions, Genesis will launch a sale process for Genesis Global Trading (GGT) and explore other value-maximizing transactions.
DCG would exchange its $1.1 billion note due in 2032 for convertible preferred stock to be issued by DCG. DCG would also refinance its existing 2023 term loans through a new, junior secured term loan in two tranches made payable to creditors in the aggregate total value of $500m.
An undetermined information is at what valuation the preferred shares will be transferred to DCG equity. DCG was valued at $10 billion in its last round of financing. But Messari states that DCG’s valuation is currently only $1.2 billion before.
Derar Islim, Interim CEO of Genesis, commented on the agreement: “I am grateful to the talented team at Genesis for their ongoing dedication and commitment to client service, and excited about working together to build Genesis for the future. I also want to express my deep appreciation to all of our clients for their continued patience and loyalty as we work through a resolution for our lending business.”
The agreement is expected to be finalized in the coming months and is subject to the approval of various regulatory and other entities. Genesis and its stakeholders are committed to providing the best possible outcome for clients and to promoting a successful and prosperous future.
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