• Galaxy Digital, a financial services firm led by Michael Novogratz, has invested $100 million to prevent Argo Bitcoin Miner’s bankruptcy.
• As part of the deal, Galaxy will provide Argo with a new asset-backed loan of $35 million and purchase its Helios Bitcoin mining facility.
• Argo will use the proceeds from the sale and loan to repay existing debts of $84 million and $1 million.
Galaxy Digital, a financial services firm led by Michael Novogratz, has announced an investment of $100 million in an effort to prevent the bankruptcy of Argo Bitcoin Miner. The move comes as part of a restructuring effort to help the firm remain financially afloat during the bear market.
As part of the deal, Galaxy will provide Argo with a new asset-backed loan of $35 million, secured by a collateral package that includes mining machines currently operating at Helios, as well as some machines located at Argo’s Canadian data centers. In addition, Galaxy will buy Argo’s Helios Bitcoin (BTC) mining facility.
The cash proceeds from the sale of Helios and a portion of the borrowings under the asset-backed loan will be used to repay existing debts of $84 million owed to NYDIG ABL LLC and $1 million to North Mill Commercial Finance. Some $6 million will also be returned to the company upon this repayment from a collateral account controlled by NYDIG ABL LLC.
Galaxy will host Argo’s 23,619 Bitmain S19J Pro mining machines located at Helios and the firm will have the right to purchase additional machines at a discounted rate. Galaxy will also receive a license to use Argo’s proprietary software and the right to receive a percentage of the gross mining revenue earned by Argo.
In a statement, Peter Wall, Argo’s Chief Executive, said, “This transaction with Galaxy is a transformational one for Argo and benefits the Company in several ways. It reduces our debt by $41 million and provides us with a stronger balance sheet and enhanced liquidity to help ensure continued operations through the ongoing bear market. It also allows us to focus on optimizing our operations with significantly lower capex [capital expenditures] and opex [operating expenses] requirements.”
The deal between Galaxy Digital and Argo is expected to help the latter remain financially stable during this bear market. It will also provide the firm with additional liquidity and help to optimize its operations. This investment is also seen as a vote of confidence in the cryptocurrency industry and could open the door for more investors to enter the space.