Argo Blockchain PLC Announces Strategic Measures to Strengthen Balance Sheet

Argo Blockchain PLC Announces Strategic Measures to Strengthen Balance Sheet

● Argo signs LOI to amend existing equipment financing agreement

● Argo plans to sell 3,400 miners for £6.0m ($6.8m) cash proceeds

● Argo intends to raise approximately £24 million (US$27 million) through a proposed subscription with a strategic investor

LONDON, UK / ACCESSWIRE / October 7, 2022 / Argo Blockchain plc, the leading global cryptocurrency mining company (LSE: ARB) (NASDAQ: ARBK), is pleased to announce several strategic actions aimed at bringing additional capital into the business and ensuring that the company has the working capital needed to implement its strategy. current and meet its obligations over the next twelve months.

As previously reported on September 9, 2022, the company experienced headwinds from both natural gas and electricity prices due to the geopolitical situation in Europe and low levels of natural gas storage in the United States. These factors, along with the bitcoin price drop since March 2022 and increased mining difficulty, have reduced the company’s profitability and free cash flow generation.

The company has been proactive in reducing operations at its flagship HELIOS facility in Dickens County, Texas, during periods of high energy prices and securing a more favorable short-term power purchase agreement (“PPA”) with a new electricity provider. The company remains optimistic about securing a long-term, low-guaranteed, fixed-price general purchase agreement and is constantly reviewing its other expenses to identify and take additional steps to manage the company’s costs.

In addition to the Company’s actions to reduce costs and preserve capital, Argo’s Board of Directors (“the Board”) has made a decision to pursue a range of financing opportunities to strengthen the Company’s balance sheet. Based on the cost reductions and the assumed completion of the transactions described below in accordance with the terms set forth in the Letters of Intent and the timing currently expected, the Company believes that its working capital will be sufficient for its current requirements, i.e. at least for the next twelve months from the date of this announcement. The Company and the Board of Directors remain of the opinion that by following these strategic steps, Argo will be well positioned and capitalized to withstand the current period of market turmoil. The Board of Directors and the Company will continue to closely monitor the Company’s cash needs and available sources of capital.

a. Amendment of Existing Equipment Financing Agreement

The Company has executed a non-binding letter of intent (“NYDIG LOI”) to modify an existing equipment financing agreement with a subsidiary of New York Digital Investment Group LLC (“NYDIG”). This adjustment frees approximately £5.0 million (US$5.7 million) in restricted cash and adjusts the amortization schedule for the company’s existing loans. The deal significantly reduces the company’s debt servicing payments and links future payments of NYDIG loans used to fund purchases of digital asset mining equipment to the profitability of mining on the network. In return, the company will provide NYDIG with an extended guarantee package. The Revised Equipment Financing Agreement is expected to contain customary covenants for an agreement of its kind. The company and NYDIG expect to close the adjustment within the next few weeks, and another announcement will be made in due course.

b- Selling mining machines

In addition, the company has signed an agreement to sell 3,400 Bitmain S19J Pro hardware to a third party, which represents approximately 340 PH/s of total retail capacity, for cash proceeds of £6.0 million ($6.8 million). Argo will host these third party devices in Helios in accordance with the Hosting Services Agreement which includes a revenue sharing arrangement.

After accounting for this sale, the company expects to achieve a total retail capacity of 2.9 EH/s by the end of October 2022.

C- Conditional subscription to ordinary shares

The Company has entered into a non-binding letter of intent with a strategic investor (the “Investor”) whereby, subject to contract, due diligence and other customary terms, the investor has agreed to subscribe for approximately 87 million ordinary shares at a price of £0.276 per common share for a total proceeds of approximately £24 million. Sterling ($27 million) (“IPO”).

Assuming the subscription is completed, the net proceeds from the subscription will be used by the Company for working capital and general corporate purposes, including capital expenditures in connection with the ongoing construction of its flagship Helios facility in Dickens County, Texas.

Assuming the subscription is completed, the investor owns 15.46% of the expanded issued company’s share capital.

The investor has the right to nominate two new non-executive members to the Board of Directors, subject to the approval of the company. One of these new Non-Executive Directors will replace the current Non-Executive Director. Following these appointments, the Board of Directors will consist of seven members.

Subscription is limited to the investor, and this announcement should not be considered an offer or an invitation to purchase or subscribe for securities in the United States.

The company and the investor expect to complete the subscription process within the next 30 days, and another announcement will be made in due course.

management comment

“We have worked tirelessly to create and implement a strategy that will support our goal of achieving sustainable growth for the company,” said Peter Wall, CEO of Argo Blockchain. “We also understand the importance of maintaining flexibility in our approach in order to respond quickly to external factors. We are pleased to have a strong relationship with lender NYDIG, who is working with us to provide flexibility and help ensure the long-term success of the company.”

“In addition, selling 3,400 Bitmain machines generates cash in the near term, and partnering with a major strategic investor boosts the balance sheet while adding significant expertise in Bitcoin mining and digital asset management to the board of directors. After careful consideration, we are convinced that taking these steps from It would put the company in a better position to navigate current market conditions and preserve shareholder value.”

Operational update

The company’s regular monthly operational update will be released on Tuesday, October 11, 2022.

Completion of transactions under letters of intent subject to entering into definitive agreements

Argo and the parties involved in the above letters of intent intend to negotiate and implement the final agreements in the near term. However, there can be no guarantee that any definitive agreements will be signed or that any transaction will be completed. In this case, the Board of Directors will review other financing options, a number of which are currently available. If Argo fails to complete any additional financing, Argo will become cash flow negative in the near term and will need to be scaled back or discontinued. The Board of Directors remains confident that the Company will be able to complete the transactions described in this announcement or in the event of failure to do so, other financing transactions to provide the Company with sufficient working capital for its current requirements, i.e. for a period of not less than the next twelve months from the date of this announcement .

Inside information and forward-looking statements

This announcement contains inside information and includes forward-looking statements that reflect the Company’s views or, as appropriate, Directors’ current opinions, interpretations, beliefs or expectations regarding the Company’s financial performance, business strategy, and management’s plans and objectives for future operations. These statements include forward-looking statements regarding both the Company and the industry and sector in which the Company operates. Statements that include the words “remain confident,” “expect,” “intend,” “plan,” “believe,” “project,” “expect,” “will,” “goals,” “goals,” “may,” “will”, “could”, “continue”, “estimate”, “future”, “opportunity”, “potential” or, in each case, its disadvantages, and similar statements of a forward-looking or forward-looking nature specifying – looking statements. All forward-looking statements address matters that involve risks and uncertainties as they relate to events that may or may not occur in the future, including the risk that the Company will not be able to secure sufficient additional financing to meet its operating needs. Forward-looking statements are not guarantees of future performance. Accordingly, there are or will be significant factors that could cause the Company’s actual results, prospects and performance to differ materially from those indicated in these statements. In addition, even if the Company’s actual results, prospects and performance are consistent with the forward-looking statements contained in this document, such results may not be indicative of results in subsequent periods. These forward-looking statements speak only as of the date of this announcement. Subject to any obligations under the Prospectus Regulation Rules, the Market Abuse Regulations, the Listing Rules and the Rules of Disclosure and Transparency and except as required by the Financial Conduct Authority (FCA), the London Stock Exchange, city law or applicable law and regulations, the Company does not undertake to comply publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise. For a more complete discussion of factors that may cause our actual results to differ from those described in this announcement, please refer to the filings the Company makes from time to time with the US Securities and Exchange Commission and the UK Financial Conduct Authority, including the section entitled “Risk Factors”. in the company’s registration statement on Form F-1.

For more information, please contact:

Argo Blockchain

Peter Wall
chief executive officer

Via Tancredi +44 203434 2334

finnCap Ltd.

Corporate Finance
Johnny Franklin Adams
Seamus Fricker

joint corporate broker
Sunella de Silva

+44 207220 0500

Tennyson Securities

joint corporate broker
Peter Krens

+44 207186 9030

OTC Markets

Jonathan Dixon
jonathan@otcmarkets.com

+44 204526 4581
+44 7731815896

tancredi smart communication
Media Relations in the UK and Europe

Salamander Daoudi
Fabio Galoni Roversi Monaco
Nasser Al Sayed
argoblock@tancredigroup.com

+44 7957549906
+44 7888672701
+44 7915 033739

About Argo:

Argo Blockchain plc is a dual-listed (LSE:ARB) (NASDAQ:ARBK) company focused on large-scale cryptocurrency mining. With a leading mining facility in Texas, and offices in the US, Canada and UK, Argo’s global and sustainable operations are powered mostly by renewable energy. In 2021, Argo became the first climate-positive cryptocurrency miner and a signatory to the Crypto Climate Accord. Argo is also involved in various Web 3.0, DeFi and GameFi projects through its Argo Labs division, further contributing to its business operations, as well as the development of cryptocurrency markets. For more information visit www.argoblockchain.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNs are approved by the Financial Conduct Authority to act as a provider of primary information in the UK. Terms and conditions relating to the use and distribution of this information may apply. For more information, please contact rns@lseg.com or visit www.rns.com.

source: Argo Blockchain PLC

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https://www.accesswire.com/719450/Argo-Blockchain-PLC-Announce-Strategic-Actions-to-St Strengthen-the-Balance-Sheet

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