On Wednesday, Cryptocurrency mining company Argo Blockchain declared to sell off its mining facilities Helios to Galaxy digital for a whopping $65 million to clear its debts and prevent bankruptcy shortly.
The company has crippled for 92% of its value in the financial year 2022, fearing likely chances of filing the chapter 11 bankruptcy protection due to insufficient capital, however, after the agreement to sell the company and fill an additional $35 million to ease off from the debt and continuing its operations in the future with the help of buying the company, crypto investor Galaxy Digital Homes.
After the transaction and the new financial agreement, the shares of Argo soar up by 120%. The freshly agreed loans allow the company to reduce its debt to the NYDIG and another tiny amount to a different lender.
As per the company statement, the new agreements enabled the company to ease off its $41 million debts as well as enhance the liquidity to ensure the operations survive the bear market.
The Company On New Strategies
The new strategies of the company focus on optimizing the operations with significantly lower Capex and Opex requirements.
The company was earlier on the brink of bankruptcy after failing to secure a financial investment of $27 million through ordinary shares. In response to prevent filing chapter 11, the company agreed to sell its assets during mid-December.
Argo’s chief executing officer Peter Wall revealed that the agreement was the only way for the company to move forward, due to the energy crisis leading up to high energy costs that led to the drain of funds because of the bear market and the collapse of cryptocurrency coins as well as notable cryptocurrency exchange FTX.
He added that The helios, the largest mining facility which started its mining operations back in May 2022 signed an agreement in early November to continue mining at its facility.
Thus, the company has stated that the types of equipment used in operations and its mining machines do not include as part of the sell-out clause. currently, the mining facility operates around 200 megawatts MW of electricity on 160- acre campus with about 40 employees.
The chief investment officer of Galaxy Digital has praised this deal as it will promote significant development in the growth of the mining operations. In addition, he expressed that Galaxy Digital is one of the most trusted operations of the decentralized blockchain.
The accession of the mining facility Helios will enhance the operating scale by promoting sustainable methods as it would represent a new stage for the company over the two-year journey in bitcoin mining.
The crypto mining industry was founded back in 2017 by CEO Peter wall, had been promising during the golden era of cryptocurrency while bitcoin reached its maximum value amid the COVID outbreak.
The mining facility promoted promising growth in solving cryptographic problems to mine cryptocurrencies. Since the surging in energy rates, the mining company has been struggling to cope with the energy crisis as well as the crumbling of the entire crypto market.
Before the collapse of the crypto market, the mining industry was deemed as an emerging challenge to power reliability in the upcoming years by North America Electric Reliability Corporation.
With the new investments, the London-based Argo industry focuses I launching two high-powered data centers which can be run by low-0cost hydroelectricity in Quebec and Canada.
This move was promising by the company as the entire industry is struggling with the energy crisis, resulting in some of the biggest miners such as Marathon Digital and Riot Blockchain stumbling their shares by 80-90% as they struggle with cash burn and debt.
Harry Aston is a technology writer with a Master’s in Computer Science from MIT. He has over 5 years experience simplifying complex tech topics like AI. His writing makes emerging technologies accessible for mainstream readers. Harry aims to educate people on AI’s potential to improve society.