Greenidge Secures a $74M Restructuring Deal with NYDIG
- Greenidge has secured a deal with creditor NYDIG under which the latter will reduce approximately $57 million to $68 million of debt.
- The Bitcoin miner “may transfer certain credits, coupons and additional assets to NYDIG, including mining infrastructure.”
- NYDIG will purchase miners with approximately 2.8 EH/s of mining capacity and Greenidge will enter into a hosting agreement.
- The board of directors at the crypto mining firm have engaged in conversations regarding a bankruptcy filing as well.
Multiple entities in the crypto space have collapsed recently, and the existing ones are busy finding ways to save their operations; a few have even struck deals with their creditors. One of them is popular Bitcoin (BTC) mining firm, Greenidge, which has confirmed signing a restructuring deal with New York Digital Investment Group, doing businesss as NYDIG. The deal is worth a whopping $74 million, and NYDIG is a major creditor of the miner.
According to a filing with the United States Securities and Exchange Commission (SEC), Greenidge has reached an agreement with its creditor NYDIG, and if the deal has been approved, we might see the bitcoin miner restructured into a hosting firm for Bitcoin mining rigs so that it is able to continue its operations. This confirms that the crypto mining industry has also been severely affected by the collapse of the world’s largest crypto coin.
As per a press release, a “non-binding term sheet” worth $74 million in debt have been signed by Greenidge and NYDIG, which would allow the latter to purchase miners with approximately 2.8 EH/s of mining capacity, and the miner “would enter into a hosting agreement with NYDIG for approximately 2.8 EH/s of mining capacity,” resulting in “a material change” to it’s current business strategy.
“Greenidge may transfer certain credits, coupons and additional assets to NYDIG, including mining infrastructure awaiting deployment at potential mining sites, contingent upon Greenidge facilitating for NYDIG rights to a mining site within three months following the completion of debt restructuring and hosting agreements,” stated the release.
It is crucial to note that in exchange for the purchased mining rigs and transfer of mining infrastructure and credits, NYDIG will reduce approximately $57 to $68 million of debt. Moreover, the fintech firm will “retain ownership of miners with a capacity of 1.2 EH/s” while the BTC miner will be “pledging substantially all of its unencumbered assets to NYDIG to secure the remaining balance of the loan.”
Greenidge Liquidity Update
As per the release, the current situation of Greenidge’s financial condition is uncertain, and there is also “substantial doubt about its ability to continue.” The firm revealed that its cash burn rate was $8 million in the past two months of which $5.5 million went to its creditor, NYDIG. The firm expects a similar cash burn rate in the coming days of December as well.
The Bitcoin miner confirmed that the board of directors at the firm has engaged in conversations regarding a bankruptcy filing in cases where: (1) potential sources of liquidity are depleted; (2) it defaults on any of its material contracts; and (3) the available capital does not allow it to meet its obligations as they become due.
“The Company [Greenidge] continues to actively explore raising additional equity capital and to engage in discussions with its lenders. The Company is considering various alternatives in connection with its wholly owned subsidiary, Support.com, including the disposition of assets and other transactions,” stated the release.