By George Ward
Earlier today, the American financial watchdog (the SEC) revealed that Greenidge had reached a debt structuring agreement with its creditor, NYDIG. According to the report, if the deal is successful, NYDIG would ultimately transform from being a mining firm to hosting BTC mining rigs on the debtors’ platform.
NYDIG And Greenidge Sign Debt Reformation Deal
According to the filing on Tuesday, the troubled mining operator, Greenidge, presented a non-binding agreement proposal to the SEC concerning the debt it owes its creditor, NYDIG. In addition, the debtor sought to reform its $74 million debt by offering equivalent mining services to its creditor.
Furthermore, if the two parties complete the agreement details, it would transform Greenidge’s business operations. For example, it would cease being a mining firm and start hosting mining rigs for NYDIG.
Additionally, the deal required NYDIG to get BTC miners with a mining capacity of about 2.8 exahash/second (EH/s). These hired miners would be hosted on the Greenidge platform, where they would work on behalf of NYDIG for about three months till the debt restructuring agreement is fully completed by both parties.
Furthermore, according to the filings, NYDIG must give Greenidge about $57 to $68 million debt reduction. This amount would be compensation for the acquired miners and mining infrastructures the firm provided.
In addition, Greenidge reportedly planned to use a significant portion of its properties as collateral to pay off the rest of the $74 million debt to NYDIG. It could absorb other miners with at least 1.2EH/s mining capacity into its fold.
According to the report, Greenidge boasted about 24,500 active miners with a mining capacity of about 2.5 EH/s as of October 2022.
Greenidge’s Financial Challenges
Greenidge has been facing financial difficulties as the current bearish crypto market continues. The firm recently announced that its financial status is worsening and expressed uncertainty over the future of its operation.
In addition, the firm reportedly used about $8 million of its reserve to fund its operation in November, of which it paid $5.5 million in principal and interest settlements. Last month, the company claimed a total balance of $22 million in its account.
While commenting on the recent development, Greenidge issued an official statement. It stated that it would try to document the details of the filings reported with its creditor, NYDIG. However, it emphasized that it is not certain it would comply fully with the terms and conditions stated in the report.
Greenidge added that there are possibilities for changes in the material or funds mentioned in the document.