Argo Blockchain Raises $7.5 Million to Pay Down Debt Through Private and Public Share Sales

Argo Blockchain Raises $7.5 Million to Pay Down Debt Through Private and Public Share Sales

Argo Blockchain (ARB), a prominent cryptocurrency mining company, successfully raised £5.7 million ($7.5 million) through the issuance of new shares. The capital was secured through a combination of a private placement, which generated £5.134 million, and a public sale, which contributed £616,000. The London Stock Exchange-listed firm announced this development on Wednesday, with the primary objective of utilizing the funds to alleviate its existing debt burden, which stood at £59.1 million before the sale.

Sale Details:

The share sale involved approximately 12% of the company’s market capitalization before the transaction. Each share was priced at 10 pence, representing a discount of around 14% to Argo’s 30-day volume weighted average price (VWAP) of its stock.

Recent Financial Challenges:

During the previous year, Argo faced considerable financial challenges due to the significant decline in the value of Bitcoin (BTC), impacting the profitability of mining operations across the industry. In April, the London-based company reported a full-year net loss of £194.2 million, in stark contrast to the £30.8 million net income recorded the previous year.

Strategic Measures to Avoid Bankruptcy:

Argo adopted strategic measures to navigate through the challenging times and avoid bankruptcy, a fate that befell some of its industry peers. One significant initiative involved selling its Helios mining facility in Dickens County, Texas, to Galaxy Digital for a substantial sum of $65 million. Additionally, the company secured a $35 million loan from Michael Novogratz’s crypto-focused financial-services firm, with the loan collateralized by its mining equipment.

With the successful capital raise, Argo Blockchain is now better positioned to address its outstanding debt, which will help strengthen its financial position. As the cryptocurrency market continues to evolve, the company’s strategic moves and innovative approach will be critical in navigating the industry’s volatility and challenges ahead.