BlocksInform
One of the many troubled crypto mining companies – Argo Blockchain – will try to avoid bankruptcy by selling its Helios installations to Mike Novogratz's Galaxy Digital.
The transaction will be worth $65 million and is intended to reduce the overall debt of the business.
The Deal
Argo made the announcement earlier on December 28, informing that it will also refinance asset-backed loans with a new one from Galaxy Digital worth $35 million with an initial term of 36 months. In addition to selling $65 million worth of helios, the mining company said it would reduce its overall debt by $41 million.
It is anticipated that transactions will be finalized by the end of the day. Galaxy has also agreed to host the fleet of helio pros s19j bitmain, while argo will maintain the property of all machines. These loans will be used as security for the new loan.
"argo will maintain ownership of its fleet of bitcoin extraction machinery, which accounts for about 2.5 eh/s of the total hash capacity. Our current heli-based miners will continue to be housed in the galaxy, that is of great quality, institutional participant in the Bitcoin mining space" – said the executive director of the company, peter wall.
Argo stated that the agreement's cash flow will enable him to "repay all existing debts, prepayment interest, and other expenses in the range of $84 million and $1 million, NYDIG ABL LLC, as well as North Mill Commercial Finance, LLC, respectively.”
They added that only a portion of their operations in Canada will be affected by the agreement, including "Quebec-based mining machines and other assets" to be used as security for the asset-backed loan.
Argo’s Troubles
With the start of the bitcoin bear market earlier this year, many miners began to feel the pain almost immediately, having to sell more BTC than they mine to cover the rising costs. The rapid increase in hash speed and difficulty also did not help them.
Argo was among those hit hard, with stock prices falling by over 50% after it announced a negative cash flow for a few consecutive quarters. The company did not present its fourth quarter results in today's statement because the United Kingdom CFA "requires semi-annual reports on financial results", and Argo is "designated by the SEC as a foreign private issuer and is required to meet regulatory requirements for domestic filings."
Nevertheless, Argo said its stocks should open for trading on Nasdaq today after the suspension request yesterday.
