The deal will involve NYDIG taking ownership of miners, with the aim to lessen chances of a bankruptcy.
Greenidge Generation, a bitcoin miner operating in New York, has reached a restructuring agreement for the $74.4 million debt with its lender, NYDIG.
The restructuring will involve NYDIG purchasing 2.8 exahash per second (EH/s) of Greenidge’s bitcoin miners, which Greenidge will host for NYDIG. This would eliminate $57-$68 million of debt, leaving Greenidge with approximately 1.8 EH/s of its own miners, while requiring that the mining firm also pledge the rest of its unencumbered assets to secure the remainder of the loan.
According to the released term sheet, “The Company’s average monthly cash burn rate during October and November 2022 was approximately $8 million, of which approximately $5.5 million per month was associated with principal and interest payments to NYDIG. Further, the Company expects to have a similar cash burn, and similar payments to NYDIG, during December 2022.”
Previously, Greenidge began sounding the alarm in regards to their financial standing due to the amount of cash they were burning, indicating that at such a speed they would run out of money by March 2023.
Bitcoin miners have been hit hard with old bull market orders getting fulfilled and new contributions to increasing hash rate, all while the price of bitcoin held by the miners plummets. In effect, they mined high and sold low.