The company issued ¥5 billion in bonds via EVO FUND to expand its Bitcoin holdings.
The bonds carry no interest and allow early redemption under specific financial conditions.
Metaplanet invests in Bitcoin without depleting cash reserves, leveraging bonds for crypto asset acquisition.
Metaplanet Inc. has revealed the offer of its 5th Series of Ordinary Bonds as the 5th Tranche of the issuance through private placement to EVO FUND and secured ¥ 5 billion $ 31,910,000. The funds from this issuance will be invested in the purchase of Bitcoins, as the company indicates in previous announcements. However this comes after Metaplanet revealed on November 28, 2024, that it was venturing into the issue of bonds amounting to ¥5 billion.
https://twitter.com/Metaplanet_JP/status/1869922805695033605
The bonds sold at ¥250 million ($1.59 million) each and are due on Dec 20, 2024. The bonds attract no interest and redeemed at the face value of the bond issued with full coupon. The companies issued these bonds for a term that will mature on Jun. 16, 2025. However, the bonds can be redeemed by the request of EVO FUND.
Key Details of the 5th Series Bonds
The 5th Series Ordinary Bonds are exclusively available to EVO FUND and are not guaranteed . According to Article 702 of the Companies Act and Article 169 of the Regulations for Enforcement of the Companies Act, no bond trustee appointed. Metaplanet has clarified that principal and interest payments will be made from its Tokyo office in Roppongi, Minato-ku.
The company stated that the issuance would not affect its consolidated financial results for the fiscal year ending Dec. 31, 2024. However, Metaplanet has committed to providing timely updates should the transaction have any material impact on its financial outlook.
Borrowed Funds and Bitcoin Investment Strategy
This bond issuance is part of Metaplanet’s strategy to invest in Bitcoin using borrowed funds. Instead of utilizing its cash reserves, the company is raising funds through bond sales to investors like EVO FUND. While this approach enables Metaplanet to acquire Bitcoin without affecting its liquidity. It also introduces financial obligations, as the funds must be paid regardless of Bitcoin’s market performance.
The structure of the bonds allows for flexibility, including early redemption if the proceeds from the exercise of the 12th Series Stock Acquisition Rights surpass the bond’s principal value. This aligns with Metaplanet’s broader strategy to balance investment opportunities and financial obligations.
This is proven by Metaplanet which sought to issue bonds to purchase bitcoins to show its commitment to cryptocurrency investments. Thus the firm’s strategy is a deliberate attempt to use funds sourced from the external environment to fund the acquisition of fixed assets all the same keeping their cash. Such investors and stakeholders are keen to note how well this strategy is setting out concerning market standing.
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