Argo Blockchain to avoid bankruptcy with $100 million from Galaxy Digital
- Argo Blockchain has negotiated a $100 million deal with Galaxy Digital that will help it avoid bankruptcy.
- The cryptomining company’s share price has risen more than 102% since the announcement of the deal.
London-based crypto mining company Argo Blockchain has turned the tide thanks to its latest deal with Mike Novogratz’s crypto investment firm Galaxy Digital. The troubled crypto miner has negotiated a $100 million bailout involving the sale of assets and a credit facility.
Argo Blockchain will sell Helios for $65 million
According to one announcement by Argo Blockchain CEO Peter Wall, the firm has completed “transformational strategic transactions with Galaxy Digital Holdings, Ltd.”
These include the sale of Helios, Argos’ top mining facility based in Texas. Galaxy Digital will buy Helios for £54 million ($65 million), making the subsidiary its flagship mining operation.
Wall has clarified that Argos will maintain ownership of all mining machines and will host machines at Helios after the acquisition. “Residing on Helios will also allow us to continue to access power through the Texas grid and participate in the ancillary services,” he added.
The deal also includes a $35 million loan to Argo that will refinance its existing asset-backed loans. This deal will reduce Argo Blockchain’s liabilities by $41 million, providing a much-needed boost to operations.
“Transactions will strengthen Argo’s balance sheet, improve Argo’s liquidity position and enable the company to continue operations” press release tired.
New agreement will help Argo avoid bankruptcy
This deal will help Argo Blockchain avoid a bankruptcy filing, which was starting to look like a very real possibility given its current liquidity problems.
It was described by the chief executive as the “only visible way forward” as the mining company navigates a ruthless bear market that has bankrupted several of its competitors in its wake.
The firm sought a capital infusion of up to $27 million earlier this year in October. When this plan fell apart, Argo warned that it may become cash-flow negative and may be forced to cease operations.
The agreement with Galaxy Digital has sent Argo Blockchain’s share price soaring. Data from the London Stock Exchange website shows that the stock is currently up more than 102% since the previous close on December 23rd. The company had Requested a 24-hour suspension of US trading in advance of this announcement.
While the percentage value of Argo’s share price appreciation may seem optimistic, it’s important to note that its year-to-date (YTD) return is currently in the red, -91.8% to be exact.
