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Bitcoin miner Greenidge signs $74 million debt restructuring agreement with NYDIG

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According to a December 20 filing with the US Securities and Exchange Commission, Bitcoin (BTC) miner greenidge has Arrive agreement with its creditor, financial technology company NYDIG, to restructure about $74 million in debt. The deal, in the form of a non-binding term paper, will significantly change Greenidge’s current business strategy, essentially shifting Greenidge from self-mining to hosting NYDIG’s own mining rigs.

Under the agreement, NYDIG will purchase miners for approximately 2.8 exahashes per second (EH/s) of mining capacity to be hosted by Greenidge, which will facilitate NYDIG’s rights to a mining site within three months after completion of debt restructuring and hosting agreements. In exchange for an amount equal to the miners purchased and the transfer of mining infrastructure and credits to NYDIG, the company will agree to reduce Greenidge’s debt from $57 million to $68 million.

In addition, Greenidge will underwrite a significant portion of its unencumbered assets to secure the remaining balance of the NYDIG loan. The company will retain ownership of the miners with a capacity of 1.2 EH/s. As of October 31, 2022, Greenidge had approximately 2.5 EH/s of mining capacity from approximately 24,500 miners in service.

However, the company also wrote that “there remains uncertainty about Greenidge’s financial condition and significant doubts about its ability to continue as a going concern.” Last month, Greenidge used nearly $8 million of its cash through operations, of which $5.5 million went to principal and interest payments. As of November 30, 2022, the company’s cash balance is approximately $22 million. Greenidge also cautioned that “NYDIG and Greenidge will seek to enter into definitive documents reflecting the terms described in this release, but no assurances can be given that these terms will not materially change nor can there be any assurances that the transactions discussed in this release will be released.” .

In September 2021, Cointelegraph reported this Greenidge has completed a merger with Support.com, a provider of customer technical support solutions, to become a Nasdaq-listed mining company. Since then, the shares have fallen over 99%, due in part to a combination of an ongoing cryptocurrency winter, rising electricity prices, increasing mining difficulty and falling market prices for bitcoin mining rigs.