Scheme of Arrangement (Restructuring Process)
| No. | Questions | Answer |
| 1 | What are the general steps in a restructuring? | The general steps in a restructuring include:
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| 2 | Who are the appointed legal counsel and financial advisors? | Our Singapore counsel is Morgan Lewis Stamford LLC and our financial advisors are KordaMentha Pte Ltd. They work closely with Kudun & Partners, appointed Thai counsel; and Hiswara Bunjamin & Tandjung, appointed Indonesian counsel. |
| 3 | What is a scheme of arrangement? | The scheme is an agreement, between a company in financial distress and its creditors, to assist the company in fulfilling its debt obligations. A scheme of arrangement works by restructuring the company’s debts and varying creditors’ rights. These are subject to the court’s supervision and sanction. This means that a scheme will be binding on all creditors if the court approves the scheme. This is even if not all the creditors approve of or participate in the scheme. |
| 4 | What are the steps of the scheme of arrangement? | It is currently intended that the scheme of arrangement will be done as a pre-pack scheme. The broad steps of the pre-pack scheme of arrangement are as follows: The scheme document is sent to all creditors who would be bound by the scheme. The scheme document includes: a. Background on the company and the reasons for the financial difficulties. b. An explanation of the scheme proposed and how it will affect the rights of creditors. c. Financial analysis of the scheme compared to a liquidation scenario. d. Instructions on voting and submitting of claims. In the current circumstances, as the customers’ debts are not disputed and given the number of customers that are required to participate in the scheme of arrangement, we have broadly proposed that: a. Customers will receive a copy of the scheme document by email. b. Customers will be able to use an electronic form to vote on the proposal. c. There will be no need for a separate proof of debt as the claim amount should be the same as that of the company’s records. However, if there is a dispute, the scheme managers will need to adjudicate and if required, an independent assessor will be engaged to make a final determination of the claim amount. Assuming that the requisite voting is obtained, there will be an application made to the Singapore Court to get sanction of the scheme. Subsequently, once the scheme is sanctioned, Zipmex will take steps to implement the scheme in accordance with the terms of the scheme document. |
| 5 | What is a ‘pre-pack scheme’? | A pre-pack scheme of arrangement allows a court to sanction a scheme without the meeting of creditors so it is a shorter timeframe and we are therefore able to accommodate a larger amount of creditors. |
| 6 | What are the specific terms of this scheme of arrangement? | The specific terms of the scheme of arrangement will be disclosed in the scheme document, but broadly speaking, if the scheme is passed and the restructuring is completed, this will allow for each customer to be made whole with the full reactivation of Z Wallets so that customers can withdraw 100% of their digital assets. For access to the Z Wallet assets, customers would be required to agree to the terms and conditions including to waive all claims and release all liability as against each relevant group entity. |
| 7 | Will a scheme of arrangement be executed in the same and simultaneous manner in all countries? | The intention is that once the scheme of arrangement is sanctioned by the Singapore Court, the implementation of the scheme of arrangement will largely be executed simultaneously across all countries. |
| 8 | How does the voting for the scheme of arrangement work? | A majority of 50.1% of ‘yes’ votes is needed (calculated from all those participating in the vote) in order for the scheme to pass. A majority of 75% of the total amount owed is needed in ‘yes’ votes of those participating in the vote in order for the scheme to pass as well. Both conditions are required for the scheme to pass. Votes who abstain/do not participate in the vote will not be counted as part of the scheme but will have equal rights as a creditor in any remediation plan and will be bound by the scheme. |
| 10 | Does each of the customers have equal suffrage in a scheme of arrangement or it is varied by our funds in Z Wallet? | Because the terms of the Private Settlement Agreement are substantially the same of the terms of the scheme of arrangement, no Customer Creditor will have different terms of settlement, whether they enter into Private Settlement Agreement(s) or vote in the scheme. |
| 11 | What happens in a liquidation of the Zipmex Group? | Zipmex’s Financial Advisers, KordaMentha, have projected the recovery to creditors of the Zipmex Group to be between 13.38% (low) to 29.74% (high) at a Group level. This means that if the companies in the Zipmex Group were to be liquidated, customers are presently projected to receive a maximum of 29.74% of their withheld assets in return. In contrast, the scheme of arrangement offers 100% recovery should sufficient votes be received to ensure the success of the restructuring |