Galaxy Digital has agreed to acquire Helios, Argo Blockchain's bitcoin mining facility, for $65 million.
The deal also includes Galaxy acquiring “related operations” of Argo Blockchain. Galaxy will also provide Argo with a $35 million loan as the company restructures, secured by a warranty package with Argo mining equipment. Argo will maintain ownership of its machines at the Dickens County, Texas, facility and will enter into a two-year hosting agreement with Galaxy to provide a location for its mining machines at the facility.
Through this agreement, not only will Galaxy's mining operations grow, but Argo will also avoid bankruptcy. The transaction will "strengthen Argo's balance sheet" and improve its liquidity position so that the company can "continue its operations," Argo.
The financing will help reduce Argo's debt by $41 million and improve its liquidity "to help ensure continued operations through the ongoing bear market," Argo CEO Peter Wall said in a statement.
In recent months, bankruptcy has dragged on in the bitcoin mining industry, as the market faces significant declines due to rising energy prices and falling miner revenues, which has squeezed margins and increased profit losses.
Core Scientific, one of the largest publicly traded crypto mining companies in the US, filed for bankruptcy. In September, bitcoin mining data firm Compute North filed for bankruptcy protection after raising $385 million in strategic funding seven months earlier.
"The transaction will accelerate the expansion of Galaxy's bitcoin mining operations and services, provide access to a tax-efficient mining infrastructure, and reduce reliance on third-party hosting providers."Galaxy said in a statement.
Although some miners are having difficulties, the acquisition of Helios points to Galaxy's intentions to grow its mining operations, as Helios will be the second facility it will own and operate.
This acquisition is a "new stage" for Galaxy's two-year bitcoin mining journey as it increases its operational scale and breadth of solutions, Chris Ferraro, Galaxy's president and chief investment officer, said in a statement.
