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Argo Blockchain Divests Mining Facility Helios For $65M As It Battles Bankruptcy Concerns – Argo Blockchain (NASDAQ:ARBK)

  • Argo Blockchain Plc ARBK subsidiary agreed to sell its Helios facility and real property in Dickens County, Texas, and related assets to Galaxy Digital Holdings, Ltd for $65 million (£54 million) and refinance its asset-backed loans.
  • Galaxy agreed to host Argo’s mining machines located at Helios.
  • Galaxy will provide Argo with a new asset-backed loan of $35 million (£29 million) secured by a collateral package that includes 23,619 Bitmain S19J Pro mining machines currently operating at Helios and specific machines located at Argo’s Canadian data centers. 
  • The cash proceeds received from the sale of Helios, along with a portion of the borrowings under the asset-backed loan, will help to repay all existing indebtedness, prepayment interest, and other fees.
  • In December, Argo warned that it might have to file for Chapter 11 bankruptcy protection due to insufficient cash, Reuters reports.
  • Argo said the deals would allow the company to continue its operations.
  • Helios will likely provide Galaxy with up to 800 MW of capacity, enabling the company to grow its proprietary and hosted bitcoin mining infrastructure beyond its previously stated goals
  • Helios, which sits on a 160-acre campus, commenced operations in May 2022 and is currently staffed by 40 employees who manage day-to-day operations.
  • In light of the transaction with Galaxy, the company will not report earnings results for Q3 2022.
  • Galaxy plans to utilize Helios as its flagship proprietary mining facility and retain the entire operations team. 
  • Galaxy will also begin offering hosting services for third-party bitcoin miners at Helios, creating a new revenue stream for the company. 
  • Argo CEO Peter Wall said, “This transaction with Galaxy is a transformational one for Argo and benefits the company in several ways. It reduces our debt by $41 million (£34 million) and provides us with a stronger balance sheet and enhanced liquidity to help ensure continued operations through the ongoing bear market.”
  • The report added that this year has been challenging for crypto miners, with shares of Marathon Digital Holdings, Inc MARARiot Blockchain, Inc RIOT, and Valkyrie Bitcoin Miners ETF WGMI plunging 80%-90% as they struggle with cash burn and debt.
  • Price Action: ARBK shares traded higher by 52% at $0.8188 in premarket on the last check Wednesday.
  • Photo Via Company

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