Metaplanet unveils $380 million share buyback after stock crashes nearly 90% from peak

Metaplanet plans to raise $329 million to refinance Bitcoin-backed loans and fund share buybacks after its stock has declined 90% from its peak.

On Oct. 13, the Japanese Bitcoin treasury company announced plans to issue ¥52 billion ($329 million) in unsecured, zero-coupon Euro-yen convertible bonds due in 2031.

Expected to close on Oct. 29, the offering will target investors primarily in Europe and Asia, with the bonds slated for listing on the Singapore Exchange.

The financing would let Metaplanet replace part of its interest-bearing, Bitcoin-collateralized debt with borrowing that requires no regular interest payments. The company expects the restructuring to free up pledged Bitcoin, reduce financing costs and improve financial flexibility without selling its cryptocurrency holdings.

Metaplanet's refinancing comes as its reliance on Bitcoin-backed borrowing has exceeded the company's internal risk limits.

As of Sept. 30, the company had approximately $649.5 million outstanding under an $800 million credit facility secured by its Bitcoin holdings.

That represented 17.7% of the net asset value of its Bitcoin reserves, well above management's guideline to keep the ratio below 10%.

Metaplanet, which held 44,000 BTC at the end of September, acknowledged that further declines in Bitcoin prices could increase the borrowing ratio by reducing the value of its cryptocurrency holdings.

To address this exposure, the company plans to allocate about ¥23.6 billion ($149 million) of the new bond proceeds to repay part of its outstanding loans in November.

The repayment would reduce borrowing under the facility to approximately $500.5 million. Based on September's reported asset values, that would lower the borrowing ratio to roughly 13.6%, assuming Bitcoin's value and other conditions remained unchanged.

However, that would still leave Metaplanet above its preferred leverage threshold, suggesting that the company remains exposed to further declines in Bitcoin prices.

Metaplanet acknowledged that replacing its existing Bitcoin-backed loans with convertible bonds would not immediately reduce its total liabilities, even as it lowers interest expenses and reliance on pledged collateral.

Although the new bonds mature in 2031, investors can demand repayment after three years, potentially forcing the company to refinance earlier than the stated maturity.