Popular Bitcoin miner, Argo Blockchain has agreed to sell its Helios mining facility to Galaxy Digital. The firm announced the development in a blog post on Wednesday. As announced, Argo intends to sell the Helios mining facility to Galaxy Digital for $65 million.
Notably, the aim of the sale is to ensure Argo source for funds to avoid filing for bankruptcy. As revealed, Argo will maintain ownership of all mining machines while Galaxy takes over Argo’s fleet of Bitmain S19J Pros at Helios. According to the firm, the transaction manifested to strengthen Argo’s balance sheet and improve its liquidity position. It also manifests to ensure Argo Blockchain PLC continues operation without any hindrance.
Recall that the Bitcoin miner has been battling with cash flow issues over the last few months. It also struggled with high energy cost together with lower bitcoin prices. This and many more have contributed to loss of profit and squeezed margins. Earlier this month, London Stock Exchange suspended Argo from trading due to its accidental post on bankruptcy protection.
According to Argo, the proceeds realized from the sale of Helios will be channeled toward the payment of existing debts, prepayment interest, and other fees. The debt amounts to about $84 million. In addition, about $1 million will be paid to NYDIG ABL LLC and North Mill Commercial Finance and LLC. Also, Argo will receive the sum of $6 million from a collateral account controlled by NYDIG ABL LLC.
Furthermore, Argo and Galaxy Digital entered into a two-year hosting agreement. As part of the agreement, the firm’s 23,619 Bitmain S19J Pro mining machines currently operating at Helios, continues to operate there. Galaxy intends to enter a fixed-price power purchase agreement(PPA) with a licensed retail electricity provider. This reportedly manifested to acquire electricity for the facility.
Argo to pay hosting fee to Galaxy Digitals
As agreed by the parties, Argo must pay Galaxy a hosting fee and must collaborate on designing a curtailment strategy to ensure its participation in certain demand response programs.
Argo Chief Executive, Peter Wall reacted to the sale of Helios. According to him, the transaction with Galaxy remains transformational and beneficial to the firm in many ways. He further that the transaction reduced the company’s debt by $41 million and provided a strong balance sheet. Wall further that it also helped to ensure continued operation through the ongoing bear market. In addition, the chief executive revealed that it allowed Argo to focus on optimizing its operations with “significantly lower capex and opex requirement.”
According to Wall, the firm wants to continue to maintain ownership of its numerous Bitcoin mining machines, which represent approximately 2.5 EH/s of total hash rate capacity.