- Celsius has managed to repay almost $143 million to Maker this month
- The troubled lender was in danger of liquidation had Bitcoin’s price dropped much further
- Celsius still has big loans outstanding, but it bought itself a little more time
Troubled lending platform Celsius has paid back $142.8 million to DeFi platform Maker, lowering its liquidation price to just $4,966 in the process. Celsius has managed to pay back a big chunk of its loan which has given it some breathing space, although there is still no sign that it is even remotely ready to resume operations. Restructuring discussions are thought to be ongoing, with bankruptcy still an option if it thinks it won’t be able to pay off its debts.
Celsius Still Clinging On
Celsius remains one of the biggest lending platforms to suffer due to the fallout of the Terra collapse and Three Arrows Capital bankruptcy, halting withdrawals in mid-June and looking for any way out of the mess that Terra, Three Arrows and its own ultra-high interest rate offerings have left it in.
A purported $2 billion buyout from Goldman Sachs might be on the cards after the parlous state of its finances was revealed, which Celsius followed up with an unsurprising personnel cull as 150 employees, representing around a quarter of its workforce, were laid off over the weekend. Celsius has also hired restructuring attorneys and consultants for advice on a potential bankruptcy filing, suggesting that the death knell could still ring.
Loan Repayment Keeps the Wolf From the Door
However, the news that Celsius yesterday repaid $120 million in loans to Maker would appear to be a glimmer of hope, suggesting that the company is at least still able to keep the ice from cracking beneath it entirely. In fact, since July 1st Celsius has repaid a total of $142.8 million worth of DAI across four separate transactions, dropping Celsius’ liquidation price on its Wrapped Bitcoin (wBTC) loan to $4,966.99 per BTC.
While this may be good news, the company is still in a heap of trouble; it still has $82 million in outstanding debt owed to Maker and, out of $1.8 billion in investments, the firm’s losses currently stand at just north of $667 million.
This means that, unless it can find new capital quickly, the repayment of this loan might be nothing more than a final gasp before the ice cracks completely.