Bitcoin (BTC) mining company Greenidge Generation has significantly reduced debt with investment management firm, New York Digital Investment Group (NYDIG).
On January 30, Greenidge entered into several agreements related to secured debt with NYDIG, transferring ownership of Bitcoin mining hardware and certain credits to NYDIG. The transaction reduced the principal and accrued debt balance with NYDIG from approximately $76 million to approximately $17 million, resulting in a reduction in aggregate debt of approximately $59 million.
One of these agreements, the senior secured loan agreement, also provides an opportunity to voluntarily repay the debt by transferring ownership of certain mining infrastructure assets. Subject to a binding agreement by NYDIG, the loan agreement may reduce the principal balance of the loan to approximately $7 million.
As previously reported, Greenidge originally signed the deal in mid-December, expecting to reduce NYDIG’s debt by at least $57 million and up to $68 million.
“The debt restructuring announced today significantly improves our balance sheet and provides a clear path forward as we enter 2023,” said Greenidge CEO Dave Anderson. The Exec expressed confidence in the strong development of the mining industry ahead, stating:
“The completion of this debt restructuring, coupled with the execution of the new hosting agreement, has increased immediate liquidity and allows us to continue to participate in Bitcoin’s future upside potential.”
Despite essentially restructuring the company into a hosting firm for Bitcoin mining rigs, Greenidge still continues to have about 10,000 miners, maintaining a capacity of 1.1 exahashes per second (EH/s), the firm said.
In the middle of the difficult cryptocurrency season, many mining companies have moved to reduce debt using the same strategy. In late December, Argo Blockchain reduced its total debt by $41 million by selling its flagship Helios mining facility and securing a $35 million loan from Mike Novogratz’s crypto investment firm Galaxy Digital.
related: Public Bitcoin mining companies face $4B in collective debt
In addition to reducing debt, Greenidge also released preliminary financial results for the fourth quarter of 2022, reporting a profit of $15 million and a loss of up to $130 million. The company generated approximately 683 BTC ($15.7 million) during Q4 2022.
Greenidge also mentioned the January 17 sale of its software subsidiary Support.com. The sale generated net proceeds of approximately $2.6 million.