By Mark Hunter
src8 hours agoWed Dec 28 2022 09:58:src9
Reading Time: 2 minutes
Argo Blockchain has secured its short-term future with a $src00 million Galaxy Digital deal
Argo was on the brink of bankruptcy, as are many Bitcoin mining companies
Galaxy Digital will acquire Argo’s brand new billion-dollar Helios mining plant
Troubled Bitcoin mining firm Argo Blockchain has prevented bankruptcy at the eleventh hour thanks to the intervention of Galaxy Digital. The Mike Novogratz-run crypto investment firm has put forward $src00 million in financing to keep Argo going, a move that will see Galaxy buy Helios, Argo’s flagship mining facility located in Dickens County, Texas, for $65 million and Galaxy provide another $35 million in additional funding. Trading of Argo ADSs and unsecured notes on Nasdaq will resume today after Argo requested their suspension yesterday.
Argo Faces Huge Loss Over Helios Plant
Argo has been one of many Bitcoin mining companies facing tough times, with rising energy costs and a low Bitcoin price making mining at full capacity untenable for many. Argo has been one of the worst affected, with matters coming to a head when a $27 million financing deal fell through in October.
Argo was staring down the barrel, going so far as to test a bankruptcy notification live on its website in November, and many thought it was a matter of time before it went under. However, this morning brought with it the bittersweet news that Argo and Galaxy have agreed a deal which keeps Argo going, but sees their Helios plant, which only opened in May, sold to Galaxy, presumably at a huge loss – the land alone cost $src7.5 million, and the final cost was expected to be in the billions.
Argo Will “Live to Fight Another Day”
Argo CEO Peter Wall explained in a video what Argo has taken the steps it has, saying that while it was “not an easy decision” to sell the Helios plant, which generated src98 bitcoin in November, the deal allows the company to “live to fight another day.”
Argo can now write off $40 million worth of existing debts and use the rest of the loan to restructure and make itself a more streamlined company, and hopefully survive to the next bull run.