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Saturday, December 3, 2022

Voyager Digital Inc (OTCMKTS: VYGVQ) Heating Up After Crypto Exchange FTX Wins $1.422 Billion Bid for Voyager’s Assets

Voyager Digital Inc (OTCMKTS: VYGVQ) is making an explosive move up the charts after the Company announced they have selected West Realm Shires Inc. (“FTX US”) $1.422 billion bid for its assets. FTX US’s bid is comprised of (i) the fair market value of all Voyager cryptocurrency at a to-be-determined date in the future, which at current market prices is estimated to be $1.311 billion, plus (ii) additional consideration that is estimated as providing approximately $111 million of incremental value. The Company’s claims against Three Arrows Capital remain with the bankruptcy estate, which will distribute any available recovery on such claims to the estate’s creditors. While this makes VYGVQ an empty shell there are a lot of shorts that now need to cover if the commons remain intact.  

The auction follows Voyager’s July 5, 2022 entrance into a voluntary restructuring process aimed at returning maximum value to customers. Since the Company’s chapter 11 filing, in furtherance of this objective, Voyager has engaged in a dual-track process, considering both a potential sale and a standalone reorganization. In-line with the process outlined in court filings, Voyager received multiple bids contemplating sale and reorganization alternatives, held an auction and, based on the results of the auction, has determined that the sale transaction with FTX is the best alternative for Voyager stakeholders. Voyager Digital currently trades at a $20 million total market valuation significantly less than many shells on the exchange. 

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Voyager Digital Inc (OTCMKTS: VYGVQ) US subsidiary, Voyager Digital, LLC,is a cryptocurrency platform in the United States founded in 2018 to bring choice, transparency, and cost-efficiency to the marketplace. Voyager offers a secure way to trade over 100 different crypto assets using its easy-to-use mobile application. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe.  

On September 26 Voyager Digital Ltd. announced after multiple rounds of bidding in a highly competitive auction process that lasted two weeks, its operating company Voyager Digital LLC, selected West Realm Shires Inc. (“FTX US”) as the highest and best bid for its assets. The Official Committee of Unsecured Creditors participated actively in the competitive auction and supports FTX US’s winning bid. 

FTX US’s bid is valued at approximately $1.422 billion, comprised of (i) the fair market value of all Voyager cryptocurrency at a to-be-determined date in the future, which at current market prices is estimated to be $1.311 billion, plus (ii) additional consideration that is estimated as providing approximately $111 million of incremental value. The Company’s claims against Three Arrows Capital remain with the bankruptcy estate, which will distribute any available recovery on such claims to the estate’s creditors. 

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FTX US’s bid maximizes value and minimizes the remaining duration of the Company’s restructuring by providing a clear path forward for the Debtors to consummate a chapter 11 plan and return value to their customers and other creditors. FTX US’s market-leading, secure trading platform will enable customers to trade and store cryptocurrency after the conclusion of the Company’s chapter 11 cases. The asset purchase agreement between Voyager Digital LLC and FTX US will be presented for approval to the United States Bankruptcy Court for the Southern District of New York on Wednesday, October 19, 2022 and the objection deadline to the transaction is October 12, 2022 at 4:00 p.m. prevailing Eastern Time. The sale to FTX US will be consummated pursuant to a chapter 11 plan, which will be subject to a creditor vote and is subject to other customary closing conditions. FTX US and the Company will work to close the transaction promptly following approval of the chapter 11 plan by the Bankruptcy Court. 

The auction follows Voyager’s July 5, 2022 entrance into a voluntary restructuring process aimed at returning maximum value to customers. Since the Company’s chapter 11 filing, in furtherance of this objective, Voyager has engaged in a dual-track process, considering both a potential sale and a standalone reorganization. In-line with the process outlined in court filings, Voyager received multiple bids contemplating sale and reorganization alternatives, held an auction and, based on the results of the auction, has determined that the sale transaction with FTX is the best alternative for Voyager stakeholders. 

The results of the auction do not change the Bar Date nor the need for customers to determine whether to file a claim. More information can be found here. Customers can file a claim on Voyager’s case website here. The deadline for filing a claim is October 3, 2022, at 5:00 PM ET. Voyager was advised by Kirkland & Ellis LLP, Moelis & Company LLC, and Berkeley Research Group. FTX US was advised by Sullivan & Cromwell LLP. The UCC was advised by McDermott Will & Emery LLP and FTI Consulting. 

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Currently trading at a $20 million total market valuation VYGVQ is virtually an empty shell after the Company announced they have selected West Realm Shires Inc. (“FTX US”) $1.422 billion bid for its assets. This could mean the commons will remain intact and there are a lot of shorts that need to cover. We have covered many BK stocks on the website over the years and besides Biotech’s and Reverse merger plays they have the potential to go from pennies to dollars under the right circumstances. While VYGVQ is certainly very risk it does have short term upside potential. The stock was over $20 per share this time last year. We will be updating on VYGV when more details emerge so make sure you are subscribed to Microcapdaily.

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Disclosure: we hold no position in VYGV either long or short and we have not been compensated for this article.

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