Argo Blockchain acknowledged that the deal to sell shares of the company worth £24m to a strategic investor to bolster working capital has fallen through.
New RNS today contains updates on the strategic actions disclosed on 10/7.
We no longer expect to close the equity subscription on the terms disclosed and we’re exploring other financing options.
We also sold 3,843 S19J Pro machines for $5.6m.
Full RNS: https://t.co/KthypzXCAT
— Argo (@ArgoBlockchain) October 31, 2022
“The company no longer believes that this subscription will be completed on the previously announced terms. Argo continues to explore other financing options,” the press release said.
To raise liquidity, the firm sold 3,843 new Antminer S19J Pro ASIC miners from Bitmain. This was the last batch of October deliveries. Argo’s revenue was around £4.8m.
As a result, the company’s hash rate on the Bitcoin network remained at 2.5 EH/s. Previously, despite the equipment rollout, Argo had expected to reach 2.9 EH/s by the end of October.
“If Argo is unable to obtain any further financing, cash flow will become negative in the near future, and the company will have to cut back or cease operations,” the mining firm said.
At the time of writing, the company’s shares on the London Stock Exchange had fallen more than 46%. The stock was trading at around £8.4, versus a peak of £282 in February 2021.
In September, Arcane Research analysts said that publicly listed mining companies maintain financial resilience, despite adverse market conditions.
However, the vast majority of them posted an accumulated loss on their balance sheets, experts noted. Argo was the exception.
In September, Compute North, not publicly traded on the stock market, filed for bankruptcy.
In October, Core Scientific warned of the risk of liquidity depletion by the end of the year and possible insolvency.
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