The crypto mining sector is continuing to suffer from low crypto prices and rising energy costs.
Argo Blockchain warned on Monday that it’s threatened by the risk of holding “insufficient cash” to sustain operations in the next month. It’s currently in advanced negotiations with an external party to sell some assets under an equipment financing transaction to improve its financial position.
Equipment financing is a type of secured loan that a company uses to purchase business-related materials such as machinery.
Argo added that it hopes to execute a deal without filing for Chapter 11 bankruptcy, “although there is no assurance that the company can avoid such a filing.”
McDermott Will & Emery LLP are acting as legal advisers and Berkeley Research Group has been appointed as a financial adviser.
The company’s shares were suspended from trading on the London Stock Exchange and the Nasdaq on Dec. 9. Argo said that was triggered by “inadvertently published materials” related to its financing efforts that were put up on its website.
That content incorrectly implied the company was filing for Chapter 11 bankruptcy, Argo said. It has requested the UK Financial Conduct Authority to restore the listing of its ordinary shares.
In November, Argo said it mined 198 bitcoins, a drop from 204 in the month prior. That was mostly due to an increase in the bitcoin network difficulty last month, according to the company.
The London-based crypto miner’s stock is down more than 90% this year.
Argo recently disclosed that an anticipated capital injection deal for $27 million failed to come through. The capital was meant to be put toward expenses for building out Argo’s flagship Helios facility in Dickens County, Texas. It isn’t clear why the funding stalled.
Other crypto miners have also disclosed financial woes in recent months. Core Scientific revealed in October that it would be unable to pay bills and that it was considering bankruptcy. Meanwhile, Iris Energy is seeking to stay afloat and is eyeing expansion.
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Source: https://blockworks.co/news/argo-bankruptcy-still-on-the-table