Bitcoin mining firm Argo Blockchain (ARBK) is in advanced negotiations to sell some of its assets and carry out an equipment financing transaction to strengthen its balance sheet and improve its liquidity, the company said in a filing with the London Stock Exchange Monday.
The London-based company said it is hopeful it will be able to make these moves outside of a voluntary Chapter 11 bankruptcy filing in the U.S., but there is no reassurance it will be able to do so.
Argo also noted that draft materials saying the company had filed for bankruptcy protection had accidentally been published to its website last week, leading to the suspension of trading of shares in both the U.K. and U.S. on Friday.
The company is now requesting that its listing in the U.K. be restored, and expects that to happen “as soon as practicable.” The miner's shares had already lost about 94% of their value in the past year, underperforming the rest of the industry.
As part of the process, the company has hired McDermott Will & Emery LLP as legal advisers, Berkeley Research Group, LLC as financial advisers and Stifel GMP and its affiliate, Miller Buckfire & Co., LLC, as investment bankers.
Argo has built a mega bitcoin mining facility in West Texas, dubbed Helios. The facility started operations in May with a plan to reach 800 megawatts (MW) of energy consumption and 20 exahash/second (EH/s) of computing power. This would have made Argo one of the world's biggest miners.
However, problems quickly emerged, and the firm found costs from the facility outpacing revenue, such that margins narrowed in the following few months. That has been a common issue in the industry as the price of energy has soared and the price of bitcoin has slumped. Argo felt the effect of soaring energy prices particularly hard as it didn't have a fixed-rate power agreement for the Helios facility.
Argo also has two smaller facilities in Canada's Quebec province.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.