Argo Blockchain will sell its crypto mining facility, Helios, for £54m to Galaxy Digital, and refinance a new asset-backed loan, as it seeks to avoid bankruptcy.
The group, which warned earlier this month that it may have to file for bankruptcy protection due to insufficient cash, said the “transformational” deals would enable it to continue its operations.
London-listed shares in Argo Blockchain, which have fallen 92 per cent so far this year, rose 120 per cent to 8.5p in early trade.
Deal: Argo Blockchain to sell its cryptocurrency mining facility, Helios, for £54m
The transactions include the refinancing of loans with a new $35 million line of credit with Galaxy, which will help reduce Argo Blockchain’s total debt by $41 million, the company said in a statement.
London-based Argo Blockchain said it plans to focus its operations on its two data centers in Quebec, Canada, which are fully powered by low-cost hydropower.
‘[The] the transaction with Galaxy… gives us a stronger balance sheet and improved liquidity to help ensure continued operations through the ongoing bear market,” said Argo Blockchain CEO Peter Wall.
Wall also emphasized that despite Argo Blockchain selling Helios, the firm had not sold any of its mining machines.
The deal comes just six months after Argo Blockchain officially launched Helios. The The Helios facility supports 200 megawatts of electricity.
The cryptominer, which was founded in 2017 by Wall, had struggled with rising costs and squeezed margins amid lower bitcoin prices and higher electricity costs.
Digital currency miners like Argo Blockchain use computers to solve cryptographic problems and receive a reward in the form of cryptocurrency.
Argo Blockchain, whose Nasdaq-listed shares were suspended on December 27, will resume trading in the US today.
In October, Argo Blockchain said it was at risk of shutting down after failing to raise new funding.
In mid-December, Argo announced that it was seeking to “engage in an equipment financing transaction” to avoid filing for bankruptcy.
The price of Bitcoin is at $13,846.63 today, after falling 60 percent from around $35,000 in the past year.
