Miner Greenidge and its creditor, fintech company NYDIG, have agreed to restructure debt totaling about $74 million. The agreement, which takes the form of a non-binding term sheet, would substantially alter Greenidge’s current business strategy by moving it away from self-mining and toward hosting NYDIG’s mining rigs.
According to the agreement, NYDIG would buy miners with a mining capacity of about 2.8 exahashes per second (EH/s) to be hosted by Greenidge, enabling NYDIG to obtain mining rights three months after the completion of debt restructuring and hosting agreements. The company would agree to a debt reduction of $57 million to $68 million for Greenidge in exchange for the miner purchases, the transfer of mining infrastructure and credits to NYDIG, and other consideration amounting to those things.
In order to secure the remaining amount of the NYDIG loan, Greenidge would also pledge a sizeable portion of its unencumbered assets as collateral. The company would continue to be the owner of miners with a 1.2 EH/s capacity. Greenidge had a 2.5 EH/s mining capacity as of October 31, 2022, with roughly 24,500 active miners.
The business added that “there remains uncertainty regarding Greenidge’s financial condition and substantial doubt about its ability to continue as a going concern” in its letter. Greenidge used about $8 million of its cash for operations last month, of which $5.5 million was used to pay principal and interest. The Company had a cash balance of approximately $22 million as of November 30, 2022. Additionally, Greenidge issued a warning, saying that while “NYDIG and Greenidge will endeavour to enter into definitive documentation reflecting the terms described in this release,” “no assurances can be made that such terms will not change materially or that the transactions discussed in this release will be completed.”
According to Cointelegraph, Greenidge successfully merged with Support.com, a company that offers customer and technical support solutions, in September 2021 to become a publicly traded mining company on the Nasdaq. Since then, shares have decreased by over 99%, in part as a result of the ongoing crypto winter, rising electricity costs, increasing mining difficulty, and falling market prices for Bitcoin mining equipment.