Bitcoin Miner Iris Energy Says Some Machines Aren't Covering Financing Costs

The company's shares fell almost 9% in early trading.

AccessTimeIconNov 2, 2022 at 12:37 p.m. UTC
Updated May 9, 2023 at 4:01 a.m. UTC

Bitcoin miner Iris Energy (IREN) said some of its mining equipment, owned by special-purpose vehicles, aren't producing enough cash to meet its financing obligations.

The firm also said Wednesday that the equipment has a market value "well below the principal amount of the relevant loans" and that it is in talks with the lender.

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  • The company has three special-purpose vehicles specifically for financing the purchase of mining equipment. Together the three have $104 million of debt outstanding. That's secured against 3.8 exahash per second (EH/s) of mining rigs. The special-purpose vehicles aren't guaranteed by the parent company, and the lenders have no recourse to the company or any of its assets, Iris Energy said.

    Iris and its subsidiaries had $53 million of cash at of the end of October, according to the company.

    In September, Iris signed a deal to sell up to $100 million in equity to investment bank B. Riley over the next two years, which would give the bank a stake of up to 31% in the miner.

    The firm also said it is exploring opportunities to use data-center capacity that may become available, and has used an added portion of its prepayments to mining rig maker Bitmain, reducing the size of those unused prepayments to $75 million from $83 million.

    Bitcoin miners have been plagued by tumbling stock prices in recent months, as they have been squeezed by depressed crypto prices and soaring energy costs.

    Iris' shares fell almost 9% to $3.09 in early U.S. trading.

    UPDATE (Nov. 2 13:22 UTC): Adds additional info on Iris’ situation and background on mining industry.

    UPDATE (Nov. 2, 13:45 UTC): Adds details of special purpose vehicles in third paragraph; updates share trading.



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    Jamie Crawley

    Jamie Crawley is a CoinDesk news reporter based in London.