Generate Capital, a lending company, is acquiring Compute North’s stake in two mega-mining facilities (a 300 MW facility in Wolf Hollow, Texas, and a 100 MW one in Kearny, Nebraska) for $5 million.
According to Tuesday’s bankruptcy documents, lending company Generate Capital is paying $5 million for the ownership stake in two mega-mining facilities held by bitcoin hosting company Compute North.
Is Generate Capital Purchasing Mining Sites From the Insolvent Compute North?
One of the biggest bitcoin mining companies in the world, Compute North, filed for bankruptcy in late September, claiming it couldn’t pay debts of up to $500 million.
The ruling sanctioning the sale of Compute North’s stake in the two mining sites was approved by a bankruptcy judge for the Southern District of Texas.
The lone bidder for Compute North’s stock was Generate Capital. Following the acquisition agreement, the court approved the sale.
According to Harold Coulby, chief financial officer at Compute North, Generate Capital agreed in February to finance the hosting company up to $300 million for the construction of two sites: a 300 MW facility in Wolf Hollow, Texas, and a 100 MW facility in Kearny, Nebraska. which owns CN Borrower LLC entirely, is the only owner of the Wolf Hollow and Kearney facilities.
The decree sanctioning the sale of Compute North’s interest in the two mining operations was issued by a U.S. Bankruptcy judge in the Southern District of Texas.
The court authorized the sale of Compute North’s equity on Tuesday, and Generate Capital was the sole bidder, as stated in the purchase agreement.
Generate Capital is paying $5 million for the sites owned by Compute North as part of the sale. In addition, by taking ownership of the sites, it will assume all liabilities and duties to clients that host their machines there.
Compute North filed for Chapter 11 bankruptcy at the end of September, claiming it couldn’t pay financial obligations of up to $500 million. Compute North was the latest victim of the bear market.
In its bankruptcy filing, Compute North blamed its financial problems on the current year’s bear market, the rising cost of electricity in the U.S., and the time it takes to build two new data centres before they start to turn a profit.
Previously, Generate Capital Provided Money for the Company’s Projects
The Bitcoin miner obtained a loan from Generate Capital, which dealt with the enormous hit. Compute North received a $300 million loan from Generate Capital in February to fund the construction of the two locations in Texas and Nebraska.
Despite being able to repay some of the money, Compute North missed payments on nearly a third of it, leaving it with an outstanding balance.
In a move to get its money back, Generate Capital acquired several of Compute North’s properties in July, including two locations where its funding had been used for construction.
Compute North filed for chapter 11 bankruptcy in late September due to Generate Capital’s action to seize control of its assets.
The Bitcoin miner was shielded from its creditors by the Chapter 11 bankruptcy filing, which also permitted it to keep running. It now has enough breathing room to devise a solution for paying off its debts without being put up for auction.