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Bitcoin Miner Argo Blockchain Says It's Close to Restructuring Without Having to Declare Bankruptcy
The London-based company warned, however, there's no guarantee it will be able to do so.
Bitcoin mining firm Argo Blockchain (ARBK) is in advanced negotiations to sell some of its assets and carry out an equipment financing transaction to strengthen its balance sheet and improve its liquidity, the company said in a filing with the London Stock Exchange Monday.
The London-based company said it is hopeful it will be able to make these moves outside of a voluntary Chapter 11 bankruptcy filing in the U.S., but there is no reassurance it will be able to do so.
Story continues
Argo also noted that draft materials saying the company had filed for bankruptcy protection had accidentally been published to its website last week, leading to the suspension of trading of shares in both the U.K. and U.S. on Friday.
The company is now requesting that its listing in the U.K. be restored, and expects that to happen “as soon as practicable.” The miner's shares had already lost about 94% of their value in the past year, underperforming the rest of the industry.
As part of the process, the company has hired McDermott Will & Emery LLP as legal advisers, Berkeley Research Group, LLC as financial advisers and Stifel GMP and its affiliate, Miller Buckfire & Co., LLC, as investment bankers.
Argo has been trying to raise $25 million to $35 million since late August. In November it became clear it needed the funds to survive. After a deal for $27 million fell through in October, the firm warned it might soon have negative cash flow.
Argo has built a mega bitcoin mining facility in West Texas, dubbed Helios. The facility started operations in May with a plan to reach 800 megawatts (MW) of energy consumption and 20 exahash/second (EH/s) of computing power. This would have made Argo one of the world's biggest miners.
However, problems quickly emerged, and the firm found costs from the facility outpacing revenue, such that margins narrowed in the following few months. That has been a common issue in the industry as the price of energy has soared and the price of bitcoin has slumped. Argo felt the effect of soaring energy prices particularly hard as it didn't have a fixed-rate power agreement for the Helios facility.
Argo also has two smaller facilities in Canada's Quebec province.
Eliza Gkritsi
Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI, having previously covered mining for two years. She previously worked at TechNode in Shanghai and has graduated from the London School of Economics, Fudan University, and the University of York. She owns 25 WLD. She tweets as @egreechee.
Nelson Wang
Nelson edits features and opinion stories and was previously CoinDesk’s U.S. News Editor for the East Coast. He has also been an editor at Unchained and DL News, and prior to working at CoinDesk, he was the technology stocks editor and consumer stocks editor at TheStreet. He has also held editing positions at Yahoo.com and Condé Nast Portfolio’s website, and was the content director for aMedia, an Asian American media company. Nelson grew up on Long Island, New York and went to Harvard College, earning a degree in Social Studies. He holds BTC, ETH and SOL above CoinDesk’s disclosure threshold of $1,000.
