Galaxy Digital’s $100 million injection is timely to save Argo Blockchain from seeking bankruptcy protection. The Bitcoin mining company announced the conclusion of talks with Mike Novogratz’s financial firm – Galaxy, to dispose of the Texas-based Helios mining unit located within Dickens Country for $65 million.
Argo Safe from Bankruptcy
The update shared in the early hours of December 28 indicated the troubled BTC miner would receive an additional $35 million loan secured from its mining equipment. Argo’s chief executive Peter Wall admitted the efforts by the embattled BTC miner to explore a survival mechanism that will sustain operations, ease debt load and retain access to the Texas power grid amidst the bearish crypto market. He lauded Galaxy’s intervention for satisfying the objectives and prolonging the BTC miner’s life.
Wall added the Galaxy transaction would bolster Argo’s financial position. He noted that the bailout is saving Argo from the bankruptcy filing. He admitted Argo management considered bankruptcy inevitable after a $27 million deal collapse in October, plunging it into a precarious situation.
Galaxy Details the $100M Bailout
In his address during the agreement signing, Argo’s official restated the update issued by the miner in early December of considering selling the assets and seeking an equipment financing deal to avert the Chapter 11 bankruptcy filing.
In support, Galaxy chief investment officer Chris Ferraro portrayed the $100 million bailout as structured to bolster the miner’s financial position and capital. He added that Galaxy’s financial health could solve Argo’s liquidity crisis. Ferraro observed that the deal would enable Galaxy to accelerate its mining capacity.
The announcement confirming Galaxy bailout triggered an uptrend for Argo Blockchains shares in the London Stock Exchange. Twenty-four hours after stopping trading in Nasdaq, the crypto mining firm’s share (ARB) increased by 93% as operations resumed in the LSE following the bank holiday.
Widespread Struggle Experienced by Crypto Mining
Argo’s bailout by Galaxy mirrors the restructuring efforts undertaken by crypto miners struggling with declining revenues driven by rising energy rates and a downtrend in Bitcoin prices. Earlier in December, Core Scientific confirmed its immense computing power could not save it from filing bankruptcy.
The situation replicated the encounter at Compute North that sought Chapter 11 protection in September. Luckily, the last-minute intervention from NYDIG through restructured debt saved rival miner Greenidge from imminent bankruptcy.
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