A new filing laid out by the United States Securities and Exchange Commission (SEC) shows that Bitcoin (BTC) miner Iris Energy received a default notice from mining facility producer Bitmain Technologies. According to the notice, the BTC miner has defaulted on $103 million of equipment loan held by two special-purpose vehicles (SPV).
Specifically stating, the filing said Iris Energy “failed to continue to engage in good faith restructuring discussions pursuant to the agreement between the Non-Recourse SPVs and the lender extending the due date for certain scheduled principal payments to November 8, 2022.”
The loans in question are principal amounts of $32 million and $71 million which are secured by 1.6 exahash/second (EH/s) and 2.0 EH/s of mining machines respectively. Another loan for $1 million, held by a wholly owned SPV and secured by 0.2 EH/s of miners, also exists.
The repayment was originally scheduled for October 25th after which the lender triggered an acceleration clause which means it is asking for immediate payment of the entire principal and accrued interest.
Meanwhile, Iris Energy disagreed with the allegations levied against it by the lender but announced that the two facilities of concern do not produce enough revenue to cover the loan obligation.
Iris Energy Request For Loan Term Modification
Iris Energy announced that if no restructuring plan is put in place to repay the debt by November 8th, it would fail to meet up with the debt obligation held by the two SPVs. Additionally, Iris Energy said that it would not provide extra financial support if the lender refused to modify the terms.
It also received another notice last week from creditors alerting the firm of failing to maintain sufficient insurance. This last notice is slated to be regarded as a default if no remedy is introduced within ten days.
If the lender decides to confiscate mining facilities as collateral for the loan like in the case of bankrupt mining host Compute North and one of its leading creditors Generate Capital, Iris Energy operations will be affected.
Before now, Iris Energy announced plans to participate in mergers and acquisitions (M&A) as part of its growth initiative.