Block reward mining company Argo Blockchain (NASDAQ: ARBK) has sold its Helios mining facility to Galaxy Digital (NASDAQ: BRPHF) for $65 million. The miner also secured a $35 million loan from the digital asset-focused investment firm as it struggles with the bear market.
In a press release, Argo confirmed that it had entered definitive agreements to sell the Helios facility and its real estate in Dickens County, Texas, to the Mike Novogratz-owned firm.
We have closed on the sale of Helios to @galaxydigital; benefits of the deal:
– Reduces debt by $41m
– Improves liquidity
– Simplifies operating structure
– Allows us to continue mining
More details: https://t.co/nGv6XK6iK2
— Argo (@ArgoBlockchain) December 29, 2022
Galaxy Digital also extended a $35 million credit facility to the miner with an initial term of 36 months. Argo put up over 23,000 Bitmain S19J Pro mining machines as collateral and other machines in its Quebec, Canada, data centers.
As the new owner of the Helios facility, Galaxy will continue to mine BTC with Argo’s mining machines, receiving a hosting fee for its services. Argo argues this will mitigate any mining rigs’ downtime from the sale of the Helios facility.
Argo will channel the cash it receives from the sale, and some cash from its new loan, to repay all its existing debts. The company says that the loans, coupled with prepayment interest and other fees, amount to $84 million owed to NYDIG and $1 million to North Mill Commercial Finance.
“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,” CEO Peter Wall commented.
The sale of the Helios facility will not affect Argo’s other operations, the company stated. It now plans to refocus its efforts on optimizing its operations at its two data centers in Quebec, which collectively churn out 140 PH/s of hash rate.
Argo has been struggling to raise capital this year, and two weeks ago, it announced that while it was seeking to restructure, it couldn’t guarantee that it would avoid bankruptcy. In October, the company attempted to raise $27 million by issuing additional shares to an unnamed investor. A few weeks later, it announced that the fundraising had fallen through, which sent its shares tumbling by over 70% overnight.
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