The deal between Greenidge and NYDIG, would essentially restructure the company into a hosting firm for Bitcoin mining rigs.
Bitcoin (BTC $16,811) miner Greenidge and its creditor, fintech company NYDIG, have agreed to restructure debt totaling over $74 million, according to a document made with the U.S Securities and Exchange Commission on December 20.
The agreement, which takes the form of a non-binding term sheet, would substantially alter Greenidge’s present business model by moving it away from self-mining and toward hosting NYDIG’s mining rigs.
According to the arrangement, 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 fulfillment 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 equating to those things.
In order to secure the remaining amount of the NYDIG loan, Greenidge would also pledge a sizeable chunk of its unencumbered assets as security. The company would continue to be the owner of miners with a 1.2 EH/s capacity.
Greenidge has a 2.5 EH/s mining capability as of October 31, 2022, with roughly 24,500 active miners. The business added that “there remains ambiguity over Greenidge’s financial health and serious doubt about its capacity to continue as a going concern” in its letter.
Greenidge spent almost $8 million of its funds for operations last month, of which $5.5 million was used to pay principle and interest. The Company had a cash balance of about $22 million as of November 30, 2022. Greenidge also warned that:
“NYDIG and Greenidge will endeavor to enter into definitive documentation reflecting the terms described in this release, but there can be no assurances made that such terms will not change materially nor can there be any assurances made that the transactions discussed in this release will be consummated”
It was revealed in September 2021 that Greenidge had successfully merged with Support.com, a company that offers customer and technical support services, to become a publicly traded mining company on the Nasdaq.
Since then, shares have decreased by nearly 99%, in part as a result of the current crypto winter, rising electricity costs, increasing mining difficulty, and falling market prices for Bitcoin mining equipment.
