The deal with B. Riley will push off repayment dates and use Greenidge stock to pay off some of the funds.Read MoreCoinDesk
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Greenidge Generation (GREE) and B. Riley (RILY) have agreed to restructure an $11 million promissory note the miner owes to the investment bank.
One of several miners to find itself struggling to meet its operating costs and debt obligations as crypto prices slumped and energy costs rose, Greenidge was hit particularly hard in 2022 thanks to its reliance on natural gas. The company saw its mining margin declining by more than half – from 42% in the second quarter of 2022 to just 20% three months later, according to CoinDesk’s calculation based on public filings.
As detailed in a Tuesday press release, under the new restructuring deal, Greenidge will raise $1 million in a stock sale underwritten by B. Riley. The miner will make a $1.9 million principal payment on the note (bringing the balance down to about $9 million), with no more payments due until June.
In addition, Greenidge is actively pursuing a sale of excess real estate from its South Carolina mining facility. Any proceeds would go towards the note. If the miner is able to pay down $6 million or more prior to June, monthly payments would be trimmed to $400,000 from the currently scheduled $1.5 million.
Greenidge previously reduced $76 million of debt to NYDIG to $17 million, by transferring 2.8 exahash/second (EH/s) of mining rigs to the lender along with accrued coupons and credits. Greenidge can further cut its debt to NYDIG by $10 million if it facilitates “for NYDIG the rights to a mining site within three months.” Greenidge has signed five-year hosting agreements with NYDIG, which “includes a profit-sharing component,” according to the press release.
Greenidge warned of its deteriorating liquidity position as early as September, a situation similar to Argo Blockchain (ARBK), which got a $100 million lifeline from Galaxy Digital, and now-bankrupt Core Scientific (CORZ).
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.
