Bitcoin (BTC) mining company Greenidge Generation Holdings has significantly reduced its debt to investment management firm New York Digital Investment Group (NYDIG).
On January 30, Greenidge signed several agreements related to his secured debt with NYDIG, transferring ownership of Bitcoin mining hardware and certain credits to NYDIG. The transaction reduced the principal and accrued interest on the debt to NYDIG from approximately $76 million to approximately $17 million, for a total debt reduction of approximately $59 million.
One of the agreements, the guaranteed priority loan, also allows for the possibility of a voluntary prepayment of the loan through the transfer of ownership of certain mining infrastructure assets. Subject to a binding agreement by NYDIG, the loan agreement can potentially reduce the principal balance of the debt to approximately $7 million.
As previously reported, Greenidge originally signed the agreement in mid-December 2022, hoping to reduce his debt to NYDIG by at least $57 million and up to $68 million.
“The debt restructuring we have announced today significantly improves our balance sheet and provides us with a clear path forward as we enter 2023,” Greenidge CEO Dave Anderson said. The executive expressed his confidence in the strong development of the mining industry to come, stating:
“The completion of this debt restructuring, along with the execution of the new hosting agreements, has significantly improved our immediate liquidity and allows us to continue to participate in Bitcoin’s future upside potential.”
Despite the company’s restructuring to become a Bitcoin mining rig hosting company, Greenidge still owns about 10,000 miners and maintains a capacity of 1.1 exahashes per second (EH/s), according to the company.
In the midst of a harsh cryptocurrency winter, many mining companies have been moving to lower their debt using similar strategies. In late December 2022, Argo Blockchain reduced its total debt by $41 million by selling its flagship mining facility Helios and obtaining a $35 million loan from Mike Novogratz’s Galaxy Digital crypto investment firm.
In addition to debt reduction, Greenidge also released preliminary financial results for the fourth quarter of 2022, reporting $15 million in revenue and up to $130 million in losses. The firm produced approximately 683 BTC ($15.7 million) during the fourth quarter of 2022.
Greenidge also mentioned the sale of its software subsidiary Support.com on January 17. The sale generated net proceeds of approximately $2.6 million.
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