Metaplanet announced plans to issue ¥52 billion ($329 million) in unsecured, zero-coupon Euro-yen convertible bonds due in 2031, expected to close on October 29. The offering targets investors primarily in Europe and Asia, with bonds to be listed on the Singapore Exchange.
The financing will allow Metaplanet to refinance part of its interest-bearing, Bitcoin-collateralized debt with borrowing that requires no regular interest payments. The company expects the restructuring to reduce financing costs, improve financial flexibility, and free up pledged Bitcoin without selling its cryptocurrency holdings.
Bitcoin Debt Pressures Capital Strategy
As of September 30, Metaplanet had approximately $649.5 million outstanding under an $800 million credit facility secured by its Bitcoin holdings, representing 17.7% of its Bitcoin reserves' net asset value. Management guidelines target keeping this ratio below 10%.
The company held 44,000 BTC at the end of September. Metaplanet acknowledged that further Bitcoin price declines could increase the borrowing ratio by reducing the value of its cryptocurrency holdings.
The company plans to allocate approximately ¥23.6 billion ($149 million) of the new bond proceeds to repay part of its outstanding loans in November. This repayment would reduce the borrowing facility to approximately $500.5 million, lowering the leverage ratio to roughly 13.6% based on September values, though this would still exceed management's preferred threshold.
The convertible bonds mature in 2031, but investors can demand repayment after three years, potentially forcing earlier refinancing.
Share Buyback Program Amid Stock Decline
Metaplanet plans to allocate up to ¥28.3 billion ($179 million) of proceeds to share repurchases under a newly authorized ¥60 billion ($380 million) buyback program. The company terminated its previous ¥75 billion repurchase authorization, established in October 2025, under which it had not acquired any shares.
The new program allows repurchases of up to 200 million common shares, representing approximately 14.7% of outstanding stock, between October 14, 2026, and October 13, 2027. If fully executed, this could reduce the outstanding share count by about 7.1%.
Metaplanet shares declined approximately 36% this year and have lost nearly 90% of their value from a June 2025 peak of ¥1,930, closing at ¥261 on October 13. The company generally avoids issuing common shares when its market-to-net-asset-value ratio falls below 1.
Potential Headwinds and Conversion Risks
CEO Simon Gerovich has agreed to lend up to 55 million personally held shares through his Gerovich Family Holdings Limited to support hedging activities associated with the convertible bonds, with an annual lending fee of 0.75%. Such arrangements could create selling pressure on Metaplanet shares even as the company executes buybacks.
The bonds could also dilute existing shareholders if investors convert them into equity. Metaplanet intends to set the conversion price above the share price corresponding to an mNAV of 1 at issuance, though final conversion terms have not been determined.
