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Another bitcoin mining company is dealing with financial problems as Iris Energy’s Form 6-K filing with the US Securities and Exchange Commission (SEC) shows that the company may be facing default on two loans. Iris Energy’s Form 6-K filing with the SEC explains that the firm “received a notice from the lender alleging the occurrence of an event of default and acceleration under the respective restricted equipment financing facilities.”
On November 7, 2022, bitcoin mining company Iris Energy updated investors on October’s operations, and the company noted that it is currently operating at a hashrate of around 3.9 exahash per second (EH/s). The bitcoin mining company also said its “Mackenzie expansion” in British Columbia, Canada, from 50 megawatts (MW) to 80 MW is “on track for energy delivery by the end of the fourth quarter of 2022.” Also, the company’s Childress facility in Texas is still in the construction and energization phase, and operations are continuing at that end.
However, a Form 6-K SEC filing filed in November indicates that two lenders claim the company defaulted on $103 million in equipment loans. The loans are held by two special purpose vehicles (SPVs) and the lenders have sent an “alleged acceleration notice” for the alleged defaults. Iris Energy said a large fraction of the exahash is unaffected by the SPV’s alleged acceleration warning. Iris Energy’s SEC filing states:
2.4 EH/s for miners and the entire group’s data center capacity and development pipeline are unaffected by the equipment limited use funding arrangements or alleged acceleration notice.
The bitcoin miner’s filing with the US regulator follows other mining companies dealing with financial problems. For example, in late September, Bitcoin.com News reported on Compute North filing for bankruptcy protection. In addition, Core Scientific told the US SEC that it was experiencing financial difficulties as Core Scientific’s “operating results and liquidity have been severely impacted by the prolonged decline in the price of bitcoin.”
As for the Iris Energy filing, one SPV says it owes $71 million and the other claims Iris Energy owes it $32 million. Iris Energy said it has data center capacity available and it “continues to explore opportunities to utilize this capacity to either host third-party miners or for self-mining using additional miners that the company has available or chooses to purchase.”
Iris Energy shares (Nasdaq: THE IRISH) has lost 19.60% against the US dollar in the last five days. A myriad of bitcoin mining companies have also seen shares slide 80% to 90% over the past 12 months, and year-to-date IREN is down 81.68% against the dollar.
What do you think of the Iris Energy SEC filing showing two companies alleging equipment loan defaults? Let us know what you think about this topic in the comments section below.
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