Bitcoin Miner Greenidge Reaches Debt Restructuring Deal With NYDIG as Bankruptcy Looms
Bitcoin mining firm Greenidge Generation (GREE) came to an agreement with its lender NYDIG about restructuring $74.7 million of debt, though a bankruptcy is still on the cards.
Cash burn is unsustainable and the firm's board is engaged "in active discussions about the potential for, and timing of, a voluntary bankruptcy filing," Greenidge said in a Tuesday filing with the U.S. Securities and Exchange Commission
Under the deal, NYDIG will purchase 2.8 exahash per second (EH/s) worth of Greenidge's bitcoin mining machines, and extinguish $57 million-$68 million of the debt. That will leave Greenidge with 1.2 EH/s of machines.
Greenidge will host NYDIG's machines, effectively changing its business model from self-mining to hosting, the filing said.
The loan in question had about $74.7 million outstanding as of Sept. 30, according to Greenidge's quarterly earnings report.
Greenidge is one of several miners that have warned about cash burn rates, including Argo Blockchain (ARBK) and Core Scientific (CORZ).
During October and November, Greenidge burned through $8 million a month, of which $5.5 million went on NYDIG payments. It expects the same cash burn rate for December, which would put a significant hole through its remaining $22 million of cash and cash equivalents.