Argo Blockchain (ARBK), a bitcoin miner, will avoid filing for bankruptcy after deciding to sell Galaxy Digital (GLXY), the Helios mining plant in Dickens County, Texas, for $65 million. Galaxy Digital will purchase Argo’s Helios facility and loan the miner $35 million to assist with restructuring.
According to the miner, the $35 million loan from Mike Novogratz’s cryptocurrency-focused financial services company will be backed by Argo’s mining hardware. Peter Wall, CEO of Argo, adds that they had been searching for a means to continue mining while lowering their debt and accessing critical power supply from Texan systems.
The acquisition will help Argo strengthen its balance sheet and prevent bankruptcy. The bitcoin miner had announced earlier this month that it was in advanced talks to sell some of its assets and complete an equipment finance deal to avoid declaring Chapter 11 bankruptcy.
Galaxy CEO: The collaboration will mutually benefit both parties
According to Chris Ferraro, the President and Chief Investment Officer of Galaxy Digital, the capital injection is purposefully to strengthen Argo’s capital structure and balance sheet.
In addition, Argo will sign a two-year hosting deal with Galaxy, guaranteeing a location for Argo’s computers to continue mining at the Helios facility.
Argo’s most significant mining facility, now Galaxy’s flagship mine, has a maximum power capacity of 180 megawatts (M.W.). They began running the facility in May to consume 800 MW of energy and produce 20 exahashes per second (EH/s) processing power. If fully developed, Galaxy Digital might become one of the biggest bitcoin miners.
The cryptocurrency miner said on Tuesday that it has asked for a 24-hour suspension of U.S. trading. Its shares are traded on the Nasdaq (ARBK) and London Stock Exchange (ARB).
Bear market’s impact striking hard on bitcoin miners
Argo is one of several miners fighting to survive. Growing energy costs drive up expenses, and persistently low bitcoin prices drive down profits. One of the largest miners by computer power, Core Scientific (CORZ), filed for bankruptcy this month. Compute North, another significant player in the industry, filed for Chapter 11 bankruptcy protection in late September. A debt restructuring agreement was also made between the bitcoin miner Greenidge and its lender NYDIG.