• Greenidge Generation, a bitcoin miner operating in New York, has reached a restructuring agreement with its lender NYDIG to eliminate $57-$68 million of debt.
• The agreement involves NYDIG purchasing 2.8 exahash per second (EH/s) of Greenidge’s bitcoin miners, which Greenidge will host for NYDIG.
• Greenidge has a cash burn rate of approximately $8 million per month, and is expected to run out of money by March 2023.
Greenidge Generation, the bitcoin miner based in New York, recently agreed to a restructuring deal with its lender, NYDIG, to reduce its debt of $74.4 million. The deal provides that NYDIG will purchase 2.8 exahash per second (EH/s) of Greenidge’s bitcoin miners, which Greenidge will host for NYDIG. This will result in the elimination of $57-$68 million of debt, leaving Greenidge with approximately 1.8 EH/s of its own miners. The company will also pledge the rest of its unencumbered assets to secure the remainder of the loan.
The average monthly cash burn rate for Greenidge during October and November of 2022 was approximately $8 million, of which approximately $5.5 million per month was associated with principal and interest payments to NYDIG. This is expected to remain consistent for December 2022 as well.
Unfortunately, the bitcoin mining industry has been taking a hit due to the price of bitcoin dropping while the miners fill up old bull market orders. This has caused Greenidge to sound the alarm regarding their financial standing, as they are burning cash at an unsustainable rate and are predicted to run out of money by March 2023.
The restructuring agreement with NYDIG is a step in the right direction for Greenidge to ensure their longevity, as they will now have access to the resources they need to remain operational. However, they still need to be careful in order to meet the standards of their loan agreement and ensure that they have enough resources to cover the costs of their debt.