• Greenidge Generation, a bitcoin miner operating in New York, has reached a restructuring agreement with its lender, NYDIG.
• The restructuring involves NYDIG purchasing 2.8 exahash per second (EH/s) of Greenidge’s bitcoin miners, eliminating $57-$68 million of debt.
• Greenidge has been burning through cash at an alarming rate, expecting to run out of money by March 2023.
Greenidge Generation, a bitcoin miner operating in New York, has recently come to an agreement with its lender, NYDIG, for a restructuring of its $74.4 million debt. The restructuring involves NYDIG purchasing 2.8 exahash per second (EH/s) of Greenidge’s bitcoin miners, which would in turn 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.
The deal comes as no surprise, as Greenidge has been sounding the alarm in regards to their financial standing due to the amount of cash they have been burning. According to the released term sheet, the company’s average monthly cash burn rate during October and November 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.
It has been a difficult period for bitcoin miners, as the price of bitcoin held by the miners plummets. Many 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 is dropping. In effect, miners mined high and sold low.
The restructuring agreement will hopefully be a saving grace for Greenidge, allowing them to continue to operate and remain in the business of bitcoin mining. Without the agreement, they would have been in a tight spot, as they would have run out of money by March 2023 without a source of new funding. The agreement will also benefit NYDIG, who will gain access to 2.8 EH/s of miners and be able to take advantage of the current market conditions.