Argo Blockchain divests mining facility Helios for $65 million as it battles bankruptcy concerns

by Arthur · December 28, 2022

Argo Blockchain divests mining facility Helios for million as it battles bankruptcy concerns

Argo Blockchain Plc (NASDAQ: ARBK) subsidiary agreed to sell its Helios facility and real estate in Dickens County, Texas, and related assets to Galaxy Digital Holdings, Ltd for $65m (£54m) and refinance its asset-backed loans.
Galaxy agreed to host Argos mining machines located on Helios.
Galaxy will provide Argo with a new asset-backed loan of $35 million (£29 million) secured by a security package that includes 23,619 Bitmain S19J Pro mining machines currently operating at Helios and specific machines located at Argo’s Canadian data centers.
The cash proceeds received from the sale of Helios, together with a portion of the loans under the asset-backed loan, will help repay all existing debt, prepayment interest and other fees.
In December, Argo warned it may have to file for Chapter 11 bankruptcy protection due to insufficient cash, Reuters reports.
Argo said the agreements would allow the company to continue its operations.
Helios will likely provide Galaxy with up to 800 MW of capacity, allowing the company to grow its proprietary and hosted bitcoin mining infrastructure beyond its previously stated goals.
Located on a 160-acre campus, Helios began operations in May 2022 and is currently staffed by 40 employees who manage day-to-day operations.
In light of the transaction with Galaxy, the company will not report earnings results for Q3 2022.
Galaxy plans to use Helios as its flagship proprietary mining facility and retain the entire operations team.
Galaxy will also begin hosting third-party bitcoin miners at Helios, creating a new revenue stream for the company.
Argo CEO Peter Wall said: “This transaction with Galaxy is a transformational transaction for Argo and benefits the company in a number of ways. It reduces our debt by $41m (£34m) and gives us a stronger balance sheet and improved liquidity to help ensure continued operations through the ongoing bear market.”
The report added that this year has been challenging for crypto miners, with shares of Marathon Digital Holdings, Inc (NASDAQ: MARA), Riot Blockchain, Inc (NASDAQ: RIOT), and Valkyrie Bitcoin Miners ETF (NASDAQ: WGMI ) is down 80-90% as it struggles with cash and debt.
Price action: ARBK shares traded 52% higher at $0.8188 in the premarket at last check on Wednesday.
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