Bitcoin miner Argo Blockchain said it is close to restructuring without having to go bankrupt. The London-based cryptocurrency company warned about this. However, there is no guarantee that you can do this.
Why is the cryptocurrency company selling its assets?
Bitcoin mining company Argo Blockchain (ARBK) is looking to sell some of its holdings. In this way, it aims to strengthen its balance sheet and improve its liquidity. For this, it is conducting advanced negotiations to carry out an equipment financing transaction. The London-based cryptocurrency firm hopes it can make these moves outside of a voluntary Chapter 11 bankruptcy filing in the US. He notes, however, that there is no assurance that he will be able to do so.
Argo also said that draft materials stating that the company had filed for bankruptcy protection were mistakenly posted on its website. He noted on Friday that it led to the suspension of stock trading in both the UK and the US. The cryptocurrency company is now requesting that its listing in the UK be reinstated. It also expects this to happen ‘as soon as possible’. Meanwhile, the miner’s shares lost about 94% of their value last year. It also underperformed the rest of the industry.
As part of the process, the company hired McDermott Will & Emery LLP as legal counsel, Berkeley Research Group, LLC as financial advisor, and Stifel GMP and its subsidiary Miller Buckfire & Co., LLC as investment banker.
Bitcoin miners are in trouble
Argo has been trying to raise $25 million to $35 million since the end of August. cryptocoin.comAs you’ve followed, it became clear in November that the company needed funds to survive. After a $27 million deal failed in October, the firm warned it could soon have negative cash flow.
Argo has built a mega Bitcoin mining facility called Helios in West Texas. The facility went into operation in May with an energy consumption of 800 megawatts (MW) and plans to reach 20 exahash/second (EH/s) computing power. This made Argo one of the largest miners in the world.
However, problems quickly arose. The firm found that the plant’s costs outstripped revenue. So much so that over the next few months, margins narrowed. This has become a common problem in the industry as the price of energy rises and the price of Bitcoin falls. Argo does not have a flat rate electricity contract for the Helios plant. Therefore, it felt particularly hard the impact of rising energy prices. Meanwhile, Argo also owns two small plants in the Canadian province of Quebec.
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