Metaplanet to Issue Convertible Bonds, Aiming to Restructure Debt Without Selling Bitcoin

Metaplanet announced Tuesday its plan to issue 52 billion yen ($329 million) in zero-coupon, euro-yen convertible bonds maturing in 2031. The company intends to allocate approximately 23.6 billion yen ($149 million) of the proceeds to repay Bitcoin-collateralized loans and 28.3 billion yen ($179 million) for share buybacks, according to a Tuesday announcement.

This financial maneuver is part of Metaplanet’s strategy to enhance its debt structure and decrease its reliance on Bitcoin-collateralized loans, aiming to achieve this without liquidating any of its Bitcoin holdings. The company currently possesses 44,000 BTC, valued at roughly $3.6 billion, as reported by BitcoinTreasuries.

The share buyback initiative is set to encompass up to 60 billion yen ($380 million) in total repurchases. This action follows a period of significant decline in Metaplanet’s share price, which closed 1.5% lower in Tokyo on Tuesday and has seen a 52.6% drop over the past 12 months, according to Yahoo Finance.

In related financial news, Metaplanet revealed earlier this month a revised capital allocation framework. This framework proposes allocating up to 15% of total assets to strategic investments, intended to support its Bitcoin accumulation and dividend payments. Additionally, in September, the company faced shareholder criticism regarding an expansion of its executive stock option pool. Subsequently, on September 11, Metaplanet announced plans to reduce this stock pool by 41%.

Why This Matters

Metaplanet’s announcement of issuing convertible bonds and planning share buybacks signifies a strategic effort to manage its financial obligations. By using bond proceeds to repay Bitcoin-collateralized loans and fund buybacks, the company aims to improve its debt structure and potentially support its share price without selling its substantial Bitcoin holdings. This move is particularly relevant given the company’s significant Bitcoin reserves and recent share price volatility.

Broader Context

Metaplanet ranks as the second-largest Bitcoin treasury firm, holding 44,000 BTC valued at $3.6 billion, according to BitcoinTreasuries. The company’s share price has experienced a notable decline, closing 1.5% lower on Tuesday and falling 52.6% over the past 12 months, as reported by Yahoo Finance. This financial restructuring occurs against a backdrop of broader market interest in Bitcoin treasuries and the financial strategies of companies holding significant cryptocurrency assets.