Bitcoin Miner To Sell Rigs Worth $60M To Cover NYDIG Debt
Bitcoin miner Greenidge hopes to offload enough inventory to reduce its $74 million NYDIG debt by up to 90%
Exclusive art by Axel Rangel modified by Blockworks
US bitcoin mining firm Greenridge has entered a non-binding agreement to settle a $74 million debt with NYDIG as concerns mount over its financial longevity.
The firm, which controls its own power plant in upstate New York, plans to offload a significant portion of its mining equipment to NYDIG, a crypto-focused financial services unit, according to a statement on Tuesday.
Selling the rigs to NYDIG would reduce Greenidge’s debt by between $57 to $68 million — representing up to 90% of its loan. Under the terms of the deal, the Nasdaq-listed miner would continue to host the machines at its facility in South Carolina.
To secure the remaining loan balance, Greenridge plans to pledge all of its unencumbered assets to the New York-based provider.
For the months of October and November, Greenridge burned through $8 million in cash where roughly $5.5 million has been diverted to NYDIG to pay principal and interest payments.
“If we complete this debt restructuring, this would improve our future liquidity and would provide a significant step toward the improvement of our balance sheet,” Dave Anderson, Chief Executive Officer of Greenidge, said in the statement.
Greenidge may also transfer credits, coupons and additional assets to NYDIG, including bitcoin mining infrastructure accrued under its non-fixed price purchase contracts with Chinese rig manufacturer Bitmain.
Greenridge plans to sell rigs with total hashrate capacity of 2.8 EH/s, while retaining ownership of miners that can output 1.2 EH/s.
Greenridge’s stock fell 18% on the day to $0.30, now down more than 98% year-to-date. The firm’s share price fell an additional 3.7% in pre-market trade Wednesday.
It’s not just Greenidge feeling the heat. Rising electricity costs and a reduction in bitcoin prices recently forced London-based miner Argo Blockchain to plan selling hardware to prevent bankruptcy The firm failed to secure a $27 million capital injection last month.
Not to mention, major miner Core Scientific just filed for bankruptcy after struggling under the weight of its own loans.
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