Auros Global Restructuring $18M Distressed Debt on Maple Finance
Crypto trading firm Auros Global announced reaching an agreement to restructure the missed settlements on the loans advanced as decentralized finance (DeFi) by Maple Finance.
Auros indicated that funds frozen when FTX filed for bankruptcy protection plunged it into a liquidity crisis. The situation hampered its ability to settle the debt owed to the blockchain-based lending platform.
Resolution to Shake Off Distressed Debt
The resolution reached through the M11 Credit, the primary creditor in the Maple Finance pool that advanced the debt will enable Auros to shake off the shackles of FTX’s bankruptcy. The statement shared by M11 Credit on February 15 indicated that AUros accumulated over $18 million in unpaid loans that became due on December 20.
The distressed debt arises from loans advanced from two lending pools on Maple Finance. The liquidity problems that befell the firm led it to miss the loan repayments, particularly with significant exposure to collapsed FTX. The liquidity crisis would compel Auros Global to seek provision liquidation in December 2022 before the British Virgin Islands court.
Reissuing Distressed Debt in Favorable Timeline and Interest
The statement conveyed by M11 Credit confirmed that Auros settled 55% of the debt from the two lending pools. The firm’s update confirmed reissuing another 40% of the distressed debt for a period capped at nine months. The reissued debt will attract 8.64% annual interest in three cycles, each averaging 90 days.
M11 Credit confirmed the renewal of the remaining 5% of the distressed debt though at zero interest. The renewed debt would carry a 90-day maturity period.
M11 Credit declared that the restructuring portrays the desire of the liquidity providers affected by the distressed debt to accomplish full recovery of funds advanced.
Debt Restructuring Offers Crucial Relief
M11 Credit portrayed the debt restructuring as offering relief for Auros Global after a turbulent credit period. The occurrence of distressed debt was inevitable for lending protocols. Many crypto firms suffered exposure to the collapse of high-profile firms, including FTX, Celsius Network and Three Arrows Capital. The implosion of the influential actors in the crypto space triggered widespread liquidity crisis, insolvency and defaults.
Meanwhile, restructuring Auros’ distressed debt marks a significant milestone for M11 Credit. M11 restated sustaining hot pursuit to recover $36 million from Orthogonal Finance. The crypto trading firm is alleged to misrepresent its financial position to M11 following the FTX implosion.
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