Bitcoin Miner Greenidge to Sell 70% of Mining Machines to Its Creditor

Bitcoin mining company Greenidge Generation announced Tuesday that it had signed a non-binding agreement sheet with the Bitcoin services firm NYDIG regarding its $74 million debt to NYDIG. 

The agreement’s details were revealed in a filing with the U.S. Securities and Exchange Commission (SEC), which showed that Greenidge is set to sell 2.8 exahash per second (EH/s) worth of Bitcoin mining machines.

The number of mining machines to be sold to NYDIG represents 70% of Greenidge’s entire mining machines. After the sale, the Bitcoin mining firm will be left with 1.2 EH/s worth of mining machines.

Greenidge seeks to use the mining machines’ sales to clear up to $57 million to $68 million worth of debts. This will reduce its existing debt to a range of $6 million to $17 million.

The statement further stated that the Bitcoin miner may likely transfer “additional assets” to NYDIG, as part of its moves to clear its debt.

Greenidge Seeks Extra Funds

In October, the U.S.-based Bitcoin mining firm sought to raise $22.8 million to settle its liquidity difficulties. Greenidge’s latest filing with the SEC reiterated its need for extra funds to run its business.

The report showed that Greenidge recorded a total capital of about $22 million in cash and cash equivalent as of November 30th, 2022. The company spent $8 million between October and November to finance its monthly activities. The firm expects to spend a similar amount in December.

In a case where the debt restructuring plan put in place by Greenidge does not go as planned or its available capital becomes insufficient to take care of its activities, the company stated that it may opt for a “voluntary bankruptcy filing.”

Holders of the company’s stock, $GREE, are likely to lose all of their investments in the asset. At press time, GREE traded at $0.35.

Why the Need for Liquidity Support?

Greenidge’s financial crunches spring from several factors. One of them is the price decrease in Bitcoin, which has also affected other Bitcoin mining firms.

Another factor that has led to its current need for financial rescue is the increase in electricity prices. This is a necessity for mining Bitcoin.

Meanwhile, concerns have been raised over the effect that Bitcoin mining has on the environment. In June, the New York Department of Environmental Conservation (DEC) denied Greenidge’s air permit renewal due to its effects on the climate.