Stronghold Digital Mining to return 26,200 mining rigs to NYDIG to clear major debt

Publicly-traded renowned Bitcoin mining firm Stronghold Digital Mining (SDIG) announced that it intends to return over 26,000 mining equipment to New York Digital Investment Group (NYDIG) in order to considerably minimize its debt. One of the top bitcoin companies, NYDIG, assists miners in financing mining hardware and power infrastructure.

After receiving a legally enforceable commitment letter from private credit investment manager WhiteHawk Capital to modify its financing agreements, the mining business also plans to restructure a convertible note for liquidity.

On Tuesday, Stronghold shared a press release revealing that it would return around 26,200 bitcoin mining equipment to NYDIG in order to pay down the entire $67.4 million balance owed to the lender.

This week, after being postponed by seven days, the bitcoin miner presented its Q2 earnings report. The business claimed that the delay was brought on by the negotiations. At the conclusion of the second quarter, Stronghold owed $127.9 million, according to the financial report. As a result, the agreement with NYDIG reduces more than half of the business’ debt.

Stronghold partners with WhiteHawk for restructuring and expansion

In the announcement, the mining company stated that it would collaborate with WhiteHawk to expand and restructure its present finance agreements into a 36-month note.

The agreement will lower the short-term principal payments while granting Stronghold $20 million in additional borrowing capacity, which it intends to utilize to strategically buy new mining equipment.

Furthermore, Stronghold reported that it restructured its convertible notes and warrants to cut the strike price on outstanding warrants from $2.50 to $0.01 in consideration for a $11.3 million reduction in outstanding principal.

Recently, several mining companies including Core Scientific and Marathon Digital have reported their Q2 reports. Interestingly, in July, Compass Mining decided to deploy 25,000 additional ASIC miners to its Texas facility in an effort to expand its operations, as TheCoinRise reported.