Bitfarms Reaches Milestone  Financing Agreement With NYDIG

Summary:
• Bitfarms has reached an equipment purchase agreement with NYDIG and is restructuring significantly. We tell you how and why.

Bitfarms, the Bitcoin self-mining company, has signed an equipment financing agreement with NYDIG ABL LLC (NYDIG). There will be an initial injection of $37 million, with further financing anticipated (but not committed) for Bunker construction phases in July and October of 2022, as well. Under the terms of the agreement, Leger and Bunker mine workers will serve as collateral for a 12-percent annual interest rate on equipment financing. The funding for the loan will begin once the assets have been installed and are functioning properly.

“We have proactively taken non-dilutive strategic actions to increase our financial liquidity and flexibility during this period of macroeconomic crypto challenges,” said Jeff Lucas, CFO of Bitfarms.

Bitfarms reduces credit facility

This most recent equipment financing is different from the US$32 million equipment financing agreement that Bitfarms had previously stated it had reached with BlockFi Lending LLC. By selling 1,500 BTC, Bitfarms has chosen to lower its US$100 million BTC-backed credit facility to US$66 million. As of June 15th, 2022, the total amount borrowed under this credit arrangement was $66 million.

To put it simply, the reduction of US$34 million in borrowing allows the corporation to use more of its BTC holdings strategically. This is due to the fact that it frees up BTC that would have been used as collateral to the facility.

What’s the way forward?

Due to recent market instability, Bitfarms is limiting its expansion and capital expenditures. The company has met all its credit obligations. In addition, in reaction to the present market crisis, it is undergoing a certain amount of reorganization. Currently, it’s re-examining mining operations and equipment growth plans, as well as the usage of current credit facilities. The maintenance of current BTC inventory as well as sales conducted under the auspices of the Company’s at-the-market offering are both subjects of the review.

Bitfarms has seven industrial-scale facilities in Quebec, one in Washington State, and one in Paraguay to support its diverse business platform. When it comes to vertically integrated mining operations, Bitfarms is a global leader in Bitcoin self-mining. Its operations include onsite technical maintenance, proprietary data analytics, and in house electrical engineering and installation.