Iris Energy faces $103 million default notice

The mining company Iris Energy notified SEC that two of its subsidiaries received a notice of default on a combined debt of $103 million.

The two special-purpose vehicles, registered by the firm to purchase equipment secured by its collateral, carry debt of $32 million (secured by devices with a total hashrate of 1.6 EH/s) and $71 million (2 EH/s).

In the notice, the creditor of the Australian Bitcoin miner said that the company was unable to continue “good-faith discussions” of debt restructuring.

On November 2, Iris Energy stated to the SEC that the units generate $2 million in monthly revenue from cryptocurrency mining. Regular debt service for this period amounts to $7 million.

The company said it has begun talks with the creditor and secured a deferral of the next payment to November 8.

If no financing-restructuring agreement is reached, a default will occur, Iris Energy warned. The creditor could seize the pledged equipment, which would affect current operations.

The company also has $1 million in debt secured by ASIC miners with a combined hashrate of 0.2 EH/s.

Cash on hand stands at $53 million. Iris Energy operates a fleet of devices with a total hashrate of 2.4 EH/s, unencumbered by credit agreements.

Some of the firm’s subsidiary companies have already terminated hosting contracts with the entities that received notices from the creditor, Iris Energy said.

The company will consider hosting third-party equipment on the vacated sites or acquiring devices for its own Bitcoin mining operations.

Iris Energy continues construction of data centres in British Columbia, Canada and Texas, United States.

The connected capacity of the latter may reach up to 600 MW, under an agreement with energy company AEP Texas.

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