Shenzhen-based BIT Mining raises money to expand overseas

Shenzhen-based BIT Mining raises money to expand overseas

BIT Mining Limited (NYSE: BTCM) recently announced it has raised $50 million in additional capital through a private placement to expand its overseas operations as China tightens restrictions on blockchain mining

The New York Stock Exchange-listed block reward miner will issue 100,000,000 Class A ordinary shares to certain institutional and accredited investors along with warrants to purchase up to an additional 100,000,000 shares. 

The purchase price for the additional securities was US$5 per 10 ordinary shares. The warrants will have a term of three years, exercisable six months following their issuance date at a price of US$6.81 per ten Class A ordinary shares. 

BIT Mining intends to use the net proceeds of the private placement to expand its business outside of China amid the government’s crackdown on BTC mining activities. The local regulators shut the company’s operations in China’s Sichuan province down last month. At the time, the company said its mining operations in Sichuan account for approximately 3% of their total revenue in May.

BIT Mining will build new overseas digital currency mining facilities, expand its infrastructure, and purchase new equipment. The location of the new facilities has yet to be disclosed. The company has recently shipped a batch of ASIC mining machines to the nearby Central Asian nation of Kazakhstan. It has also invested in a digital currency mining facility in the state of Texas.

In a June statement to shareholders, BIT Mining CEO Xianfeng Yang said: “We are accelerating our overseas development for alternative high-quality mining resources. We believe our vision and early-mover advantage will enable us to be agile in responding to the globally evolving regulatory environment.”

Other Chinese blockchain companies are said to be looking to move their businesses outside of China. Hangzhou-based Cannan Inc, an ASIC mining hardware manufacturer, disclosed that it had established its first overseas after-sales service center in Kazakhstan in June.

Soon after news of the private placement spread, shares of BIT Mining dropped by 19%. BIT Mining expected the private placement to close on or about July 16, 2021, subject to the satisfaction of customary closing conditions. New York-based investment bank, H.C. Wainwright & Co., acted as the sole placement agent for the offering.

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