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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).
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