Argo is selling its flagship facility for USD $65 million. As part of the deal, a $35 million loan from Galaxy has also been secured.
- Argo Blockchain Sells Its Flagship Bitcoin Mining Facility For $65 Million
- Signed an agreement with Galaxy Digital that also includes a loan
- The transaction reduces the miner’s debt and allows it to avoid bankruptcy
- For Mike Novogratz’s Galaxy, deal is expansion opportunity
The mining company Bitcoin, Argo Blockchainhas agreed to sell one of its crypto mining facilities in a bid to avoid bankruptcy protection.
The miner reported this Wednesday that it has reached an agreement with the cryptocurrency investment firm, Galaxy Digital, to sell its flagship mining facility Helioslocated in Texas, USA, for an amount of USD $65 million.
Additional for sale, Argo is also obtaining a loan of USD $35 million from Galaxy, a firm led by renowned investor Mike Novogratz. This loan will have an initial term of 36 months and will use more than 20,000 mining machines of Argo, some operations in Helios and others located in centers in Canada, as collateral.
The deal will help reduce the overall debt burden of Argo Blockchain in USD $41 million and will simplify its operating structure. “The transactions will strengthen Argo’s balance sheet, will improve Argo’s liquidity position and allow the company to continue its operations“said the miner in a release.
Argo moves to avoid bankruptcy
Argo Blockchain has been trying to stay afloat while struggling with cash flow problems, as have other industry peers. At the end of October the company warned of possible bankruptcy and closure of operations after the cancellation of a share sale agreement. The miner has been looking for financing alternatives to avoid the worst case scenario.
A few weeks ago, Argo It had announced that it was in advanced negotiations to sell some of its assets and carry out an equipment financing operation to strengthen its balance sheet and improve its liquidity.
The news of the sale comes a day after the company, which is listed on the New York and London markets, temporarily suspended trading on the Nasdaq stock exchange. Previously, the largest stock exchange in the US warned Argo about the unacceptable price of its shares, which have been trading below $1 USD for more than 30 days in a row.
In general, the crypto mining industry has been in trouble this year, in part, due to factors such as the slowdown in prices in the crypto market and the increase in energy costs. Last week, Core Scientificone of the largest mining companies in Bitcoin and which is also publicly traded, filed for bankruptcy, and before Compute North he did the same.
An opportunity to Galaxy
For Galaxy Digitalon the other hand, the new agreement with Argo represents an opportunity for its mining business with the potential to position it as a leading firm in the industry as others face difficulties.
With a power capacity of up to 180 megawatts (MW), Helios It was the largest mining facility in Argo Blockchain. The facility began operations in May with a plan to reach 800 megawatts (MW) of power consumption and 20 exahash per second (EH/s) of computing power, and will now become the flagship mining operation of Galaxy.
If expanded to its full capacity, it could turn a Galaxy in one of the miners Bitcoin biggeras he points out CoinDesk.
“Quality infrastructure and access to low-cost energy are the cornerstones of a successful mining operation, making the Helios acquisition an incredible milestone for the growth of Galaxy’s mining business.“said Amanda Fabiano, director of mining for Galaxy in a statement cited by that publication.
Galaxy is already working on building its first proprietary crypto mining site in Texas, which is expected to open fully by early 2023. Helios will be its second mining facility Bitcoin planned and part of its efforts to expand into the sector.
Article by Hannah Estefanía Pérez / DailyBitcoin
Picture of Depositphotos
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