Argo Blockchain Secures $40M Financing Agreement To Support Merger And Acquisition Initiatives
In Brief
Argo Blockchain has signed a term sheet for up to $40 million in convertible loans to upgrade mining equipment and explore M&A opportunities.
Bitcoin mining company publicly traded on Nasdaq, Argo Blockchain announced that it has signed a non-binding term sheet for a senior secured convertible loan facility of up to $40 million. The agreement outlines an initial funding tranche of $15 million, with the potential for additional disbursements totaling up to $25 million over the next 18 months.
According to the company, the funds will be allocated toward upgrading its mining equipment at the Baie-Comeau facility in Quebec, enhancing its overall financial position, and evaluating potential merger and acquisition opportunities.
“We believe this financing will enable profitable growth at Argo and strengthen our balance sheet,” said Matt Shaw, Chairman of the Board, in a written statement. “The Argo team is working closely with the Investor Group to complete due diligence and refine our business plan in a timely manner. The company looks forward to providing further updates as they materialize,” he added.
Argo Blockchain’s Non-Amortizing Financing To Carry 8% Interest Rate And 25% Conversion Premium
The proposed financing will be structured as non-amortizing debt, carrying an approximate interest rate of 8% and a conversion premium of 25% based on Argo’s share price at the close of trading on the day before final agreements are executed. The funding is expected to come from up to three multinational institutional investors and will include 30% warrant coverage, with the warrants also priced at a premium to the closing share price. Upon completion of the definitive agreements and obtaining shareholder approval, the Investor Group will secure three seats on Argo’s board of directors.
Additionally, Argo has granted the Investor Group an initial 20-day exclusivity period, with potential extensions considered in good faith based on the progress of negotiations. Under certain conditions, the company has agreed to a break fee of $150,000. Finalizing the financing will require shareholder approval and a waiver, and Argo will issue a prospectus to facilitate the listing of shares issued through the financing and associated warrants.
Argo Blockchain plc is a publicly traded blockchain technology company specializing in large-scale cryptocurrency mining. The company operates a mining facility in Quebec and maintains offices in the United States, Canada, and the United Kingdom. Committed to sustainability, Argo primarily powers its global operations with renewable energy. In 2021, it became the first cryptocurrency mining company to achieve climate-positive status and signed the Crypto Climate Accord, reinforcing its commitment to environmentally responsible mining practices.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
