Scheme of Arrangement (Restructuring Process)
|1||What are the general steps in a restructuring?||The general steps in a restructuring include:|
|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.|
|9||Who will be allowed to vote in the scheme?||Creditors whose assets under management are under USD 5,000 in value as at the date of the Group’s applications for moratorium (i.e. 22 July 2022) will not automatically be invited to vote on the schemes, but will be bound by the terms of the schemes. In other words, should the schemes obtain the requisite majority and be approved by the Singapore Court, all creditors (including the creditors whose AUM are under USD 5,000 in value) will be treated exactly the same as every other creditor who had participated in the scheme.|
ii. The value threshold of USD 5,000 has been chosen because it reduces the number of participating creditors, which is a much more manageable number of Customer Creditors for the logistical implementation of the voting exercise.
iii. Instead, Customer Creditors whose AUM are under USD 5,000 in value will be sent an email providing details of the scheme, and such creditors will have two options. The first option is to take no further action and save themselves the trouble of voting in the proceedings, and be bound by the terms of the scheme if the scheme is approved by the requisite threshold of scheme creditors and approved by the Singapore Court. The second option is “opt in” to participate in the voting process, which they can do by following the applicable instructions for the voting process. In this case, if scheme is approved by the requisite threshold of scheme creditors and approved by the Singapore Court, such creditors will be bound by the terms of the scheme whether or not such creditor had voted “for” or “against” 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||When will the Court approval be sought?||The Zipmex Group targets mid-March 2023 as an indicative and realistic timeline.|
|12||When will access be granted to the Z Wallet Assets?||The indicative timetable for the completion of the investment is end of March 2023. Access is anticipated to be granted to Customer Creditors to withdraw their Z Wallet assets on or around early April 2023, assuming that the scheme of arrangement is approved by the creditors and by the Singapore Court.|
|13||What currency will I receive in my Z Wallets when it opens?||You will receive the assets in the respective currencies that are currently denoted in your Z Wallet in the amounts that you own. i.e. if you have 0.5 BTC, 1 ETH and 10,000 USDC, you will receive the assets in those respective amounts and currencies denoted.|
|14||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|
|15||What is the latest timeline for the scheme?||Last day for lodgment of the Proof of Debt Form and Ballot Form (either electronically or via returning annexed forms) (“Lodgment Date”) – 21 February 2023 not later than 4:00 p.m. (Singapore time)|
Notification of Adjudication of Proofs of Debt – 7 March 2023
Notification of outcome of Vote Solicitation – 21 March 2023
Court Hearing to sanction the Scheme – To be announced
Scheme Effective Date – To be announced
End of Moratorium – 2 April 2023
*The timeline above is as of 8 Feb 23. Should there be any futher announcement, Zipmex will inform customers through its official channels*
|16||What will happen if the amount of assets under Z Wallet that creditors claim is different from those of the company’s debt balance?||In case of Z Wallet balance discrepancy, our financial advisor, KordaMentha, will administer the balance recheck with Zipmex and the creditor to ensure the accuracy of the claim. For further information on this process, please refer to Section 6 of the Scheme document.|
|17||I have not received any email regarding the scheme of arrangement and respective documents. What should I do?||The communication regarding the scheme will be handled and sent out by KordaMentha. If you have not recieved any email, please check your ‘spam’ or ‘junk’ inbox in your email.|
If email(s) couldn’t be found, please reach out to any of our official channels/customer support teams.
|18||I received the scheme email but the amount shown on the email isn’t correct. What should I do?||We advise that you fill in the amount that you believe you are owed. Ultimately, this shouldn’t affect the amount of the tokens you are getting back as we are giving full access to Z Wallets once the scheme is approved and any deals are closed. The proof of debt is for verification only – it doesn’t determine how much you will be receiving once Z Wallet is open.|
|19||Is ZMT in ZipLock included in the scheme ?||ZMT in ZipLock isn’t included in the scheme. Please note that ZMT & GOLD are now available for withdrawals from the Z Wallet via the Zipmex website. However, we have still included these creditors as part of the Scheme as you are still considered part of the creditor list as of 22 July 2022.|
You may choose to participate in the Scheme, but you are not required to. Only the current balances of ZMT & GOLD in your Z Wallet as at the date of your voting will be counted for the purposes of the Scheme. If you have already transferred your ZMT and/or GOLD into your Trade Wallet, you will not be entitled to further claims beyond the original amounts of GOLD & ZMT as of 22 July 2022 after submission of this form.