BTC Miner Greenidge Makes a $74M Deal with Creditor NYDIG

Greenidge, a Bitcoin miner, and its creditor, fintech firm NYDIG, have reportedly settled on a plan to restructure over $74 million in debt, as revealed in a document made with the United States Securities and Exchange Commission on December 20. 

There would be a significant shift in Greenidge’s business strategy as a result of the non-binding term sheet, and it will be shifting its focus from self-mining to hosting NYDIG’s mining rigs.

Within three months of the conclusion of debt restructuring and hosting arrangements, NYDIG would have the right to a mining site by purchasing miners with roughly 2.8 exahashes per second (EH/s) of mining capacity to be hosted by Greenidge. 

The company has proposed a debt reduction for Greenidge ranging from $57 million to $68 million in exchange for consideration equal to the bought miners and the transfer of mining infrastructure and credits to NYDIG. 

Greenidge would also put up a considerable amount of collateral, comprising a significant portion of its unsecured assets, to cover the remaining debt of the NYDIG loan. 

The company plans to keep the miners it now uses (with a capacity of 1.2 EH/s). Approximately 24,500 miners were in operation as of October 31st, 2022, giving Greenidge a mining capacity of about 2.5 EH/s.

Greenidge’s Cash Flow

Last month, Greenidge spent $8 million, out of which, $5.5 million on principle and interest. The business had roughly $22 million in cash on hand as of November 30th, 2022. 

The announcement stated 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.”

Meanwhile, NYDIG reportedly had to announce the layoff of 33% of its staff in October despite raising hundreds of millions of dollars for an institutional Bitcoin (BTC) fund.