By George Ward
Amid the crypto bear market trend, Argo Blockchain has managed to shore up its finances after agreeing on a deal with Galaxy Digital to sell its Helios facility to the crypto trading firm.
Argo Avoid Bankruptcy with Strategic Deal
Reports indicate that the struggling crypto mining firm will be issued a new loan of $35 million from Galaxy, with the Mike Novogratz firm accepting Argo’s Helios mining facility as collateral for the new loan. Furthermore, the latest agreement will see the mining company sell its largest facility, based in Dickens County, Texas, to Galaxy Digital for $65 million to offset its rising debts.
According to Peter Wall, the CEO of Argo Blockchain, the past couple of weeks have been challenging for the firm as the crypto winter hit the firm’s overall operation. Wall noted that the miner has been looking for ways to keep its operations afloat, cut down its debt, and continue utilizing the Texas power system.
The CEO added that the agreement with Galaxy is beneficial as it provides the needed funds to enable Argo to maintain a robust balance sheet and enough liquidity to finance its operations.
Meanwhile, the mining firm added that it seeks other ways to refinance its loans with new asset-based ones. The recent sale of Helios to Galaxy will help the firm to reduce its total debt margin by $41 million.
Furthermore, the mining firm’s issue has been in the making since the start of the current bear market, when mining firms started selling off more BTC tokens than the ones already mined to survive the crypto winter. In addition, the rising hash rate and mining difficulty make it increasingly difficult for miners to balance the book as the bearish trend continues to make operations challenging.
The mining company is among several other firms badly hit by the crypto winter, as its stock prices fell by over 50% after its quarterly reports showed negative cash inflows for the year.
Selling Helios to Galaxy
Early in December, Argo revealed that it was at risk of going bankrupt with insufficient cash to finance its operations for January. The mining firm added that it risks losing its Nasdaq position due to the looming liquidity crisis and has not been able to file the complete report for the fourth quarter of the year due to regulatory requirements.
Thus, the deal with Galaxy will see Argo hand over its most extensive mining equipment to the Novogratz-owned firm. The Helios mining facility is the most significant mining infrastructure, with nearly 20 exahashes of mining power.
The equipment will become Galaxy Digital’s pioneering mining equipment. Furthermore, should Galaxy expand Helio’s mining capacity, it would become one of the largest mining pools in the world.
Part of the agreement specifies that Argo could host some of its mining computers in part of the Helios facility for two years.
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