FTX’s investment arm, Alameda Research, has announced a $45 million cash deal to sell its interest in Sequoia Capital to the Abu Dhabi sovereign wealth fund, Al Nawwar Investments RSC Limited.
The deal is subject to approval by Delaware bankruptcy judge John Dorsey, and is part of the bankrupt company’s efforts to sell its investments in early stage crypto and tech ventures in order to repay creditors.
FTX chose to enter into the agreement with Al Nawwar Investments RSC Limited based on their superior offer and ability to execute the sale transaction within a short time frame.
The agreement could be closed as early as March 31, although deals made by bankrupt companies are subject to close judicial scrutiny.
FTX group filed for bankruptcy in November, and Dorsey granted permission in January for some of FTX’s more easily separable assets to be offered for sale.
Those included derivative arm LedgerX, stock-clearing platform Embed, and Japanese and European units. However, FTX management has stated that there’s still a significant balance-sheet shortfall, which hasn’t been helped by poor record keeping at the company.
The Abu Dhabi sovereign wealth fund, Al Nawwar Investments RSC Limited, is ultimately owned by the government of Abu Dhabi, and already invests in Sequoia, according to the court documents.
The sale of Alameda’s stake in Sequoia is part of the bankrupt company’s efforts to repay its creditors, and the deal could help them to make a significant dent in their outstanding debt.
However, deals made by bankrupt companies are always subject to close judicial scrutiny, so it remains to be seen whether the sale will be approved by the bankruptcy judge.