As an experienced financial analyst with a background in the crypto and mining industries, I have closely followed Argo Blockchain’s journey and faced my fair share of volatility in this space. The recent announcement of their £6.5 million private share placement comes as no surprise given the industry-wide challenges we’ve seen lately.
1. Cryptocurrency miner Argo Blockchain, a publicly listed Bitcoin mining firm, intends to secure approximately £6.5 million (approximately $7 million) from an unnamed institutional backer to repay obligations due to Galaxy Digital and for various business-related activities.
On Tuesday, it was disclosed that the main source for raising funds for our company, which is traded on both the Nasdaq and the London Stock Exchange (London Stock Exchange), would be a private offering of shares.
Details of the Private Share Placement
In this deal, 57.8 million ordinary shares will be offered for sale at £0.1125 apiece on the London Stock Exchange. Additionally, there are warrants granted for purchasing another 57.8 million shares at the same price. The validity of these warrants lasts for a five-year term.
1) The cost of positioning is higher than Argo’s recent trading mean, yet it offers a 10% reduction compared to the closing price on July 29. As per the announcement, H.C. Wainwright & Co. has been appointed as the sole agent for this transaction, managing its execution exclusively.
It is expected that the company’s shares will become available for trading on the London Stock Exchange’s Main Market, around July 31, 2024.
After the shares are sold and trading begins, Argo intends to allocate the resulting earnings towards various corporate expenses. The firm stated that a portion of these profits would be earmarked for managing company requirements, maintaining operations, and addressing other corporate objectives.
Repaying Galaxy Digital
1. Furthermore, Argo intends to settle the $35 million debt it owes to Galaxy Digital. It took out this loan from the company in 2021 for business expansion purposes, rather than liquidating its Bitcoin (BTC) reserves.
2022 marked a turn for the worse in the industry as it plunged into a significant crypto winter, with Bitcoin and Ethereum reaching record lows following their impressive highs of around $70,000 and $4,000 respectively from the previous year. Consequently, this market downturn left the crypto mining company unable to meet its profit expectations to repay its loan. Since then, Argo has been actively working towards reimbursing the loan and maintaining profitability for investors who believe in the company’s long-term vision.
Argo Sells Bitcoin Mining Site for Loan Repayment
1) Prior to the latest financing round, Argo owed approximately $4 million to Galaxy Digital in March. With this debt, their outstanding obligations amounted to roughly $14 million at that point.
Approximately $6 million worth of funds were obtained from the sale of one of the company’s Bitcoin mining sites, specifically the Mirabel Facility in Quebec. This site boasts a five-megawatt (MW) energy capacity and has been acquired by an unidentified purchaser. Some of its personnel have been transferred to the company’s Baie Comeau facility in Quebec.
Read More
Sorry. No data so far.
2024-07-30 14:36