American company Stronghold Digital Mining announced “substantial measures” to restructure debt with a reduction in Bitcoin mining capacity in the second quarter.
The firm eliminated the outstanding debt on a loan to purchase equipment from NYDIG, returning about 26,200 ASIC miners with a total hash rate of roughly 2.6 EH/s.
Stronghold also agreed with WhiteHawk to extend the loan repayment term from 14 to 36 months and a $20 million credit facility.
Taken together with changes to the terms of the convertible bond issuance, the measures allowed the company to reduce the principal debt by $79 million and interest payments through year-end by $113 million.
Stronghold operates two power plants with a combined capacity of 165 MW in Pennsylvania, which use coal-mining waste.
“Our power-generation capacity remains unchanged, so despite the short-term reduction in the bitcoin mining fleet, we have greater access to strong electricity markets that remain tight. We believe this is especially right for the next six months, including winter, when forward prices suggest that electricity sales will be an attractive alternative to mining,” said Greg Beard, CEO of Stronghold.
He added that the company will continue to invest in the energy business and will also consider opportunities to buy mining equipment at “reasonable” prices.
In the second quarter, Stronghold mined 637 BTC — up 45% from January–March. The company’s fleet consisted of about 16,000 devices with a hash rate of around 1.4 EH/s.
For the reporting period the firm posted a net loss of $40.2 million on revenue of $29.2 million.
As of June 30, Stronghold’s cryptocurrency reserves stood at 268 BTC.
On October 20, 2021, the company conducted an IPO on Nasdaq, issuing 6,687,305 Class A shares at $19 for a total of $127 million. In November, amid bitcoin price highs, the shares traded above $33. On August 16, the closing price for the securities stood at $3.19.
ForkLog examined how the Bitcoin price decline affected major miners and what lies ahead for the industry next in a separate article.
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