WazirX completes recovery token allocation and distributes 85% of rebalanced net liquid platform assets to users within 10 days

WazirX has completed the allocation of recovery tokens to all eligible users under the court-approved scheme. Following the platform’s restart on October 24, WazirX successfully distributed approximately 85% of the rebalanced net liquid platform assets to eligible users within 10 business days, as outlined in the arrangement, according to a press release.The allocation of recovery tokens has now been completed within the 60 business day timeline specified in the schedule. Eligible users can view their assigned RTs directly from the Funds page in the WazirX app.

Also read | Parag Parikh Flexi Cap Fund raises stake in ITC, 10 others; cuts exposure to Infosys in DecemberRecovery tokens are issued to plan creditors on a pro-rata basis based on each user’s approved claim. The tokens are designed to ensure that users remain proportionately involved in any future recovery actions the platform achieves over time.

Under the scheme, recoveries are evaluated in recurring three-month periods. During such an evaluation cycle, when at least $10 million is realized, a portion of that value will be allocated for the repurchase of the recovery tokens. If the value recovered by the platform in a given period is less than $10 million, the recovery claim is not lost; it continues into the next period and is combined with new recoveries until a distribution becomes viable.

Currently, recovery tokens are not tradable. Depending on applicable legal and regulatory requirements, RTs may become tradable in the future.

Here’s a simplified example to understand how RTs are assigned, according to the release. Also read | MF Tracker: Axis Large Cap Fund turns Rs 10,000 SIP into Rs 58 lakh in 16 years

As of July 18, 2024, Priya, a creditor, had a total claim of $10,000 against the WazirX platform. $546 million is the total claim value as of 1:00 PM IST on July 18, 2024. A total of 1 billion Recovery Tokens will be distributed among creditors. Claim percentage calculation is the formula that determines what percentage of the total claim accrues to Priya.

RT allocation is equal to the creditor’s claim rate multiplied by the total number of recovery tokens.

This formula calculates how many RTs Priya will be assigned. After all the calculations, Priya is assigned 18,315,0183 RTs.
(Disclaimer: The recommendations, suggestions, views and opinions of experts are their own. These do not represent the views of The Economic Times.)