Argo Blockchain (LON: ARB) (NASDAQ: ARBK) announced Wednesday that it has struck a deal to sell its Helios Bitcoin mining facility in Dickens County, Texas, for £54 million ($65 million) and refinance its asset-backed loans.
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The struggling Bitcoin miner requested a 24-hour trading suspension on the Nasdaq on Tuesday, stating it was going to make an announcement Wednesday morning before the start of London trading.
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Argo had been in talks to secure financing and warned on December 12 that it was at risk of having insufficient cash to support its ongoing business operations within the next month. However, in the near term, at the very least, it seems to have found a solution.
According to the company's press release, Galaxy has agreed to host Argo's mining machines at Helios.
Furthermore, Galaxy will provide Argo with a new asset-backed loan of £29 million ($35 million) with an initial term of 36 months. The financing will be secured by a package that includes 23,619 Bitmain S19J Pro mining machines currently operating at Helios and specific machines located at Argo's Canadian data centers.
Argo will use the cash raised from the Helios sale and a portion of borrowings under the asset-backed loan to “repay all existing indebtedness, prepayment interest, and other fees of approximately $84 million (£70 million) and $1 million (£1 million), owed to NYDIG ABL LLC and North Mill Commercial Finance, LLC, respectively.”
The Canadian assets held by Argo are not impacted by the agreement other than some machines in Quebec used as collateral for the loan. Argo said it plans to refocus its operations on growing and optimising operations at its data centres in Quebec.
The deals are expected to close on Wednesday, December 28, 2022, and Argo expects trading on the Nasdaq and London Stock Exchange to resume today.
“This transaction with Galaxy is a transformational one for Argo and benefits the company in several ways. It reduces our debt by $41 million (£34 million) and provides us with a stronger balance sheet and enhanced liquidity to help ensure continued operations through the ongoing bear market. It also allows us to focus on optimizing our operations with significantly lower capex and opex requirements,” said Peter Wall, Argo's Chief Executive.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.