Bitcoin miner Argo Blockchain (ARBK) will avoid filing for bankruptcy after agreeing to sell its Helios mining facility in Dickens Country, Texas, to Galaxy Digital for $65 million.
The miner will also get a new $35 million loan from renowned investor Michael Novogratz’s crypto-focused financial services firm, which will be secured by Argo’s mining equipment, according to a statement sent to CoinDesk.
“Over the past several months, we have been looking for a way to continue to exploit the bear market, reduce our debt, and maintain access to the single power grid in Texas,” Argo CEO Peter Wall told CoinDesk. “This deal with Galaxy accomplishes all of those goals, and it allows us to live to fight another day.”
The transaction will help Argo strengthen its balance sheet and stave off bankruptcy after it found itself in a precarious position when a $27 million financing deal fell through in October. Earlier this month, the miner said he was in advanced talks to sell some of its assets and complete an equipment financing transaction to avoid filing for Chapter 11 bankruptcy.
The deal with Galaxy was structured to strengthen Argo’s balance sheet and capital structure, Chris Ferraro, president and chief investment officer at Galaxy, told CoinDesk. When the miner launched its process, “we were able to completely solve the problem for Argo, while accelerating the expansion of our own mining capabilities,” he added.
Shares of the crypto miner more than doubled as trading began on the London Stock Exchange. Tuesday, the company asked for a 24-hour suspension to trade its Nasdaq-listed shares, while the London market was closed for a UK bank holiday.
Argo is among several miners struggling to stay afloat in the face of rising low bitcoin energy costs (BTC) prices.
earlier this month, Basic scientist (CORZ), one of the biggest miners in computing power, filed for bankruptcy, and in September, Compute North, another big company in the sector, Filed for Chapter 11 Bankruptcy Protection. Last week, bitcoin miner Greenidge said it had reached a debt restructuring agreement with its lender Nydig, although the prospects of a bankruptcy filing still loom.
Texas Waist Center
Helios, which was Argo’s largest mining facility, has up to 180 megawatts of electrical capacity and will become Galaxy’s flagship mining operation. Ease started operations in May under Argo, with a plan to reach 800 megawatts of power consumption and 20 exahash/second of computing power. If expanded to full capacity, it could make Galaxy one of the biggest bitcoin miners in the world.
“Quality infrastructure and access to low-cost energy are the cornerstones of successful mining, making the acquisition of Helios an incredible step for the growth of Galaxy’s mining business,” said Amanda Fabiano, head of mining at Galaxy, said in a statement. .
Additionally, Argo will enter into a two-year hosting agreement with Galaxy, guaranteeing a place for Argo’s computers to continue operating the Helios facility, according to the release.
Bear market opportunity
The brutal crypto winter, exacerbated by the crypto exchange FTX’s implosionhas created opportunities for some investors to acquire crypto assets at cheaper values.
The transaction will be the second of its kind in a month for Galaxy. Earlier this month, a bankruptcy judge approved a deal for Galaxy to buy crypto self-custody platform GK8 from bankrupt crypto lender Celsius Network at a “significantly lower” price than what Celsius paid for GK8 a year ago.
Helios will be the second bitcoin mining facility that Galaxy will own and operate, as the company said it is working on several longer-term solutions to diversify and reduce theoretical risk for its mining unit. Galaxy recently began construction on its first exclusive mining site in Texas, which is should be fully operational by January, according to its third-quarter earnings report.
“Galaxy aspires to be one of the most trusted nodes of the decentralized future,” Ferraro said in the release. “The acquisition of Helios represents another step in our two-year journey in bitcoin mining that increases our scale of operation and the breadth of our solutions, creating lasting value for the largest decentralized network. of digital assets and for shareholders.”
Read more: Exposure to FTX Contagion from Bitcoin Miners May Amplify Industry Pain
UPDATE (December 28, 08:18 UTC): Add the London share price reaction to the sixth paragraph.
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