Argo Blockchain Divests Mining Facility Helios For $65M As It Battles Bankruptcy Concerns

Author: Anusuya Lahiri | December 28, 2022 08:09am

• Argo Blockchain Plc (NASDAQ:ARBK) subsidiary agreed to sell its Helios facility and real property in Dickens County, Texas, and related assets to Galaxy Digital Holdings, Ltd for $65 million (£54 million) and refinance its asset-backed loans.
• Galaxy agreed to host Argo's mining machines located at Helios.
• Galaxy will provide Argo with a new asset-backed loan of $35 million (£29 million) secured by a collateral package that includes 23,619 Bitmain S19J Pro mining machines currently operating at Helios and specific machines located at Argo's Canadian data centers. 
• The cash proceeds received from the sale of Helios, along with a portion of the borrowings under the asset-backed loan, will help to repay all existing indebtedness, prepayment interest, and other fees.
• In December, Argo warned that it might have to file for Chapter 11 bankruptcy protection due to insufficient cash, Reuters reports.
• Argo said the deals would allow the company to continue its operations.
• Helios will likely provide Galaxy with up to 800 MW of capacity, enabling the company to grow its proprietary and hosted bitcoin mining infrastructure beyond its previously stated goals. 
• Helios, which sits on a 160-acre campus, commenced operations in May 2022 and is currently staffed by 40 employees who manage day-to-day operations.
• In light of the transaction with Galaxy, the company will not report earnings results for Q3 2022.
• Galaxy plans to utilize Helios as its flagship proprietary mining facility and retain the entire operations team. 
• Galaxy will also begin offering hosting services for third-party bitcoin miners at Helios, creating a new revenue stream for the company. 
• Argo CEO Peter Wall said, "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."
• The report added that this year has been challenging for crypto miners, with shares of Marathon Digital Holdings, Inc (NASDAQ:MARA), Riot Blockchain, Inc (NASDAQ:RIOT), and Valkyrie Bitcoin Miners ETF (NASDAQ:WGMI) plunging 80%-90% as they struggle with cash burn and debt.
• Price Action: ARBK shares traded higher by 52% at $0.8188 in premarket on the last check Wednesday.
• Photo Via Company

Posted In: ARBK MARA RIOT WGMI