Bitcoin mining company Argo Blockchain has announced that it has entered into definitive agreements with Galaxy Digital Holdings that will see the miner sell its Helios facility in Dickens County, Texas.
Argo Blockchain said in a press release on Wednesday that the deal, which will also see Galaxy’s Helios miners, is valued at $65m (£54m).
In addition, Galaxy will provide Argo with a new asset-backed loan in the aggregate amount of $35m (£29m) for an initial period of 36 months, using 23,619 Bitmain S19J Pro miners currently in operation at Helios and some hardware in Argos’ data center. in Canada as collateral.
Argo Blockchain has seen its shares plunge more than 90% over the year amid rising energy costs and falling bitcoin prices.
Faced with its financial challenges, the company began selling its Bitcoin reserves back in June, setting aside the capital to fund operating costs. Earlier this year, Argo also saw a $27 million fundraiser, which ran in October.
The company on Tuesday asked to suspend trading of its shares and unsecured securities on the Nasdaq Stock Exchange until Wednesday.
Argo to pay off existing debts
In today’s announcement, the company said the cash proceeds from the sale of its Texas facility, along with a portion of the loans under the asset-backed loan, will be used to pay off existing debt, prepayment interest and other fees of approximately $84 million (£70 million) and $1 million (million pounds sterling), owed to NYDIG and North Mill Commercial Finance respectively.
“This transaction with Galaxy is transformative for Argo and benefits the company in many ways,” Argo CEO Peter Wall said in a statement. “It reduces our debt by $41m (£34m) and gives us a stronger balance sheet and improved liquidity to ensure continued operations through the ongoing bear market.”
According to Argo, the company will now look to shift focus to growth and optimization operations at its two data centers in Quebec, which are powered entirely by low-cost hydroelectric power.
The company said it currently has about 140 PH/s of hash rate capacity at its Baie-Comeau and Mirabel facilities, with 15 megawatts and 5 megawatts of capacity respectively.
The announced agreement also means that Argo will not report third-quarter 2022 results for the time being.
The company explained that the Securities and Exchange Commission has classified it as a foreign private issuer and is required to comply with legal registration requirements in its local market, as the UK’s Financial Conduct Authority requires semi-annual reporting of financial results.
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