Bitcoin miner Argo will avoid bankruptcy with $100 million deal from Galaxy Digital • TechCrunch

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Galaxy Digital has agreed to acquire Argo Blockchains Helios bitcoin mining facility for $65 million, the two companies announced on Wednesday.

The deal also includes Galaxy’s acquisition of related operations from Argo Blockchain. Galaxy will also provide Argo with a $35 million loan when it restructures the business, secured by a collateral package with Argo mining equipment. Argo will retain ownership of its machines in the Dickens County, Texas facility and enter into a two-year hosting agreement with Galaxy to provide a place for its mining machines in the facility.

With this deal, not only will Galaxys mining operations grow, but Argo will also avoid bankruptcy. The transaction will strengthen Argos’ balance sheet and improve its liquidity position so the company can continue operations, Argo said in a statement.

The financing will help reduce Argos’ debt by $41 million and improve its liquidity to help ensure continued operations in the ongoing bear market, Argos CEO Peter Wall said in a statement.

In recent months, bankruptcy persists in the bitcoin mining industry as the market faces significant downturns due to rising energy prices and falling miner earnings, which have squeezed margins and increased profit losses.

Core Scientific, one of the largest publicly traded crypto mining companies in the United States, filed for Chapter 11 bankruptcy last week. In September, Bitcoin mining data firm Compute North filed for bankruptcy protection. filed for Chapter 11 bankruptcy after raising $385 million in strategic funding seven months earlier.

The transaction will accelerate the expansion of Galaxy’s bitcoin mining operations and services, provide access to tax-efficient mining infrastructure, and reduce reliance on third-party hosting providers, Galaxy said in a statement.

Even though some miners are struggling, the acquisition of Helios signals Galaxy’s intentions to expand its mining operations, as Helios will be its second facility that it will own and operate, alongside its first proprietary mining site announced earlier this year.

This acquisition is another milestone for Galaxy’s two-year bitcoin mining journey as it increases its scale of operations and the breadth of its solutions, Chris Ferraro, president and chief investment officer at Galaxy, said in a statement. .

Argo shares rose 77.43% on the day to around GBX$6.39 on the London Stock Exchange. Meanwhile, the Bitcoin price fell slightly on the day, around $16,750 in the same time frame.

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