By selling the flagship Helios mining facility and getting a loan of $35 Million from Galaxy Digital, Argo Blockchain has reduced its total debt by $41 Million which is both a big drawback and a good thing.
Argo Blockchain the cryptocurrency mining facility has taken its decision with difficulty to sell its flagship Helios mining facility so that it can survive the ongoing bear market. On Dec 28, an officially announced deal with Mike Novogratz’s crypto investment firm Galaxy Digital by Argo Blockchain’s CEO Peter Wall.
The deal announced was that Argo will sell their Helios flagship mining facility for 65 million dollars. Argo Blockchain has already been cashing their mined Bitcoin to reduce their loan to Galaxy Digital.
Furthermore, Galaxy Digital will also provide Blockchain with a new equipment finance loan worth $35 Million which will help them in order to reduce their debt which is worth $65 Million.
“We’ve used the proceeds of that sale in a new Galaxy loan to pay off the debt that we owed to NYDIG and a tiny bit to another secured lender,”
The new transactions are done to reduce Argo’s total debt by $41 million and also to improve operating structure and liquidity, that’ll allow the firm to continue its mining operations, the CEO further announced. Wall also stated that the deal was the
”only viable path forward” to pass through the bear market amongst the pressure from high energy costs combined with the low Bitcoin price.
Wall also stated that even if Argo is selling Helios, the firm has still not sold any of its mining machines.
“Those are going to continue to mine at the Helios facility,”
Wall said, Argo also added that they have signed an agreement to keep running their mining machines at Helios.
“Staying at Helios will also allow us to continue to access power through the Texas grid and participate in the ancillary services, which are provided by Ercot.”
the deal was announced six months after Helios was officially launched in May 2022. Helios facility is known as the largest Argo mining facility that is in Dickens County that is supporting 200 megawatts (MW) of electricity which is considered a large pinpoint.
In contrast, Baie Comeau another Argo facility that operates around 15 MW which is nothing compared to the Helios mining facility. There is news that tells Argo’s struggle to secure their financing after they failed to raise $27 million via the subscription for ordinary shares.
In October, Argo said that it was at risk of closing due to the failure to raise new financing. During December, Argo Blockchain expressed that it was negotiating to sell its assets and trying to
“engage in an equipment financing transaction”
to avoid the filing for bankruptcy. Also, Argo did not fulfill the request to respond to Cointelegraph’s request to comment on the deal announced by Argo Blockchain.