Hut 8 begins to make changes after acquiring Bitfury assets

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Canada-based cryptocurrency mining company Hut 8 had a pretty good 2019, seeing a year-over-year increase of 250% in its third-quarter profits and also making its debut on the Toronto Stock Exchange. The success allowed it to purchase assets from competitor Bitfury, and the company now wants to keep its momentum going. It has announced several changes of the company’s top brass, as well as certain updates to the deal with Bitfury, which included the purchase of nine of the latter’s data centers.

In a press release, Hut 8 announced that its co-founder and CEO, Andrew Kiguel, is stepping down. It isn’t clear when Kiguel, who will also relinquish his spot on the company’s board of directors, will depart, but he will stay on until a replacement is found. That search is already underway.

Kiguel says in the release, “As a co-founder, it’s been a privilege to help build Hut 8 from a start-up to a category-leading company that’s generated over $115 million in revenue since 2018. We’ve accomplished significant milestones, including raising over $100 million in debt and equity and the completion of our 67 MW facility in Medicine Hat. Hut 8 survived the 2018 bitcoin price collapse and emerged the world’s largest publicly traded bitcoin miner. In addition, Hut 8 was the first cryptocurrency company to list on the Toronto Stock Exchange in 2019.”

Hut 8 took advantage of the announcement to also provide an update of its negotiations with Bitfury. In an effort to reduce operational expenses, Hut 8 has amended the agreement to give it greater leeway in setting up contracts with outside vendors, while allowing Bitfury to also seek new contracts with other miners around North America.

As a result, the “impact of these changes includes a reduction in annual fees paid to Bitfury of up to $2 million. As part of these changes, Hut 8 intends to repay its unsecured debt obligation to Bitfury of US$4.75 million and refinance it with a US$5 million [BTC]-collateralized credit facility with Genesis Global Capital, LLC. The refinancing will be completed at a lower interest rate, saving Hut 8 an additional US$102,125 annually.”

It isn’t clear by the announcement when the refinancing deal will be finalized. It follows less than two months after Hut 8 and Genesis signed a $15-million credit facility that had been offered as a refinance of a $14-million loan that the mining company held with Galaxy Digital Lending.