According to a Dec. 20 filing with the U.S. Securities and Exchange Commission, Bitcoin (BTC) miner Greenidge has reached an agreement with its creditor, fintech firm NYDIG, to restructure approximately $74 million of debt The deal, in the form of a non-binding term sheet, would represent a major change to Greenidge’s current business strategy, essentially transforming Greenidge from auto-mining to hosting NYDIG’s mining rigs.
Under the agreement, NYDIG would purchase miners with approximately 2.8 exahashes per second (EH/s) of mining capacity hosted by Greenidge, which would facilitate NYDIG’s rights to a mining site within three months of completion of the debt restructuring and accommodation agreements. In exchange for consideration for the purchased miners and the transfer of mining infrastructure and credits to NYDIG, the company would accept a debt reduction of $57 million to $68 million for Greenidge.
In addition, Greenidge would pledge a significant portion of its unencumbered assets to secure the remaining balance of the NYDIG loan. The company would retain ownership of miners with a capacity of 1.2 EH/s. As of October 31, 2022, Greenidge had approximately 2.5 EH/s of mining capacity of approximately 24,500 miners in service.
However, the company also wrote that “there is uncertainty about Greenidge’s financial condition and substantial doubt about its ability to continue as a going concern.” Last month, Greenidge used approximately $8 million of its cash during operations, of which $5.5 million went toward principal and interest payments. As of November 30, 2022, the company’s cash balance was approximately $22 million. Greenidge also cautioned that “NYDIG and Greenidge will endeavor to enter definitive documentation that reflects the terms described in this publication, but there can be no assurance that those terms will not materially change, nor can any assurance be given that the transactions discussed in this publication. l ‘liberation will be consummated’.
In September 2021, Cointelegraph reported that Greenidge completed a merger with Support.com, a provider of customer and technical support solutions, to become a publicly traded Nasdaq mining company. Since then, shares have fallen more than 99%, in part due to a combination of the ongoing crypto winter, higher electricity prices, higher mining difficulty, and the prices of lowest market of Bitcoin mining rigs.
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