Greenidge Signs Debt Restructuring Deal With NYDIG

According to a filing with the United States Securities and Exchange Commission (SEC), the agreement would help Greenidge restructure a considerable portion of its $74 million debt with NYDIG.

Greenidge would have to transfer ownership of approximately 2.8 EH/s of mining capacity to NYDIG, leaving the former with 1.2 EH/s of mining capacity. The ownership transfer would make Greenidge a host of the miners belonging to NYDIG.

The distressed Bitcoin miner may also have to transfer certain credits, coupons, and assets, including mining infrastructure awaiting deployment at potential mining sites, to NYDIG within three months.

Upon completion, the debt would be reduced by $57-$68 million, leaving Greenidge with about $6-$17 million. Greenidge would then pledge all its unencumbered assets to NYDIG to secure the remaining balance.

Commenting on the agreement, Dave Anderson, CEO of Greenidge, said:

“We are pleased with the progress of our constructive negotiations with NYDIG to address our secured debt… If we complete this debt restructuring, this would improve our future liquidity and would provide a significant step toward the improvement of our balance sheet.”

Anderson believes that the execution of the hosting agreement would enable Greenidge to continually be a part of bitcoin’s future upside potential.

“We are pleased to continue working with Greenidge. As the company optimises to account for current market conditions, we look forward to working together on potential future strategic opportunities and remain strident,” Trevor Smyth, Head of Structured Financing at NYDIG, said.

Greenidge Faces Liquidity Issues

Notably, any alteration in the term sheet would affect Greenidge’s liquidity and may eventually drive the firm into bankruptcy.

During October and November, the company recorded an average monthly cash burn rate of $5.5 million per month and is expected to have the same in December. Unfortunately, the Bitcoin mining firm may not have enough cash in the next two months.