Greenidge signs $74 million debt restructuring deal as bankruptcy fears emerge
Bitcoin (BTC) miner Greenidge Generation has entered into a $74 million debt restructuring agreement with cryptocurrency lender NYDIG, according to the SEC on Dec. 20. filing.
The restructuring, which is expected to improve Greenwich’s future liquidity and balance sheet, is based on a non-binding term sheet signed on 19 December.
Transfer credits and coupons accrued to Greenidge under a non-fixed price purchase agreement with Bitmain Technologies in exchange for a significant number of miners.
According to the application, the lender will get 2.8 EH/s per second mining equipment hosted by Greenidge. The deal will eliminate her $68 million in debt from approximately $57 million.
Meanwhile, the BTC mining company retains ownership of 1.2 EH/s of mining equipment. Greenidge will also transfer its acquired mining infrastructure to potential mining sites awaiting deployment within three months of the completion of the debt restructuring and hosting agreement.
Greenidge CEO Dave Anderson commented on the announcement:
“Once completed, this debt restructuring will improve future liquidity and will be an important step towards improving our balance sheet. We believe we can continue to participate in future upside potential.”
Greenidge said it had an $8 million monthly cash burn in October and November 2022 and expects a similar cash burn in December.
The filing with the SEC emphasized that Greenidge’s financial position was uncertain. Here are some of the filings:
“Greenwich’s financial situation remains uncertain and there is considerable doubt about its ability to continue as a going concern.”
The miner has disclosed that it is looking to raise additional equity capital and may dispose of its assets.
In order to secure its remaining outstanding debt with NYDIG (which may have a balance of $6 million to $17 million), Greenidge will purchase its remaining mining-related assets, infrastructure assets, shares in subsidiaries, and certain cash balances. provide additional collateral to
Loan agreements contain positive, negative and financial restrictions, as well as early redemption and default events. In the event of default, NYDIG reserves the right to seize or take other legal action against her Greenidge and such collateral.
Concurrent with the debt restructuring, Greenidge and NYDIG enter into a long-term hosting agreement. With this, Greenidge will not only offer hosting services for up to 74 megawatts (MW) of energy capacity, but also restructuring.
The hosting agreement requires NYDIG to pay a hosting fee that covers power and direct costs associated with managing the mining facility, as well as profit-sharing arrangements for gross profits.
The filing also noted that Greenwich’s board of directors was also considering filing for personal bankruptcy.
Greenidge’s stock fell 99.21%. It is currently trading at $0.31 after dropping about 15% on December 20th.
Some BTC miners are struggling quite a bit in the current bear market conditions. The declining value of Bitcoin, combined with high energy costs and record levels of mining difficulty, put them in a tough spot.
One of Bitcoin miners, Compute North, has filed for bankruptcy. Another miner, Argo Blockchain, has accidentally revealed plans to file for bankruptcy.
