TeraWulf Restructures Debt With $32 Million From A Public Equity Offering

Key Points:

• Bitcoin miner TeraWulf reached a binding agreement in principle with its existing lenders on certain debt modifications, subject to the equity capital raise condition.
• The company has also raised $32 million from a public equity offering, which is expected to bring the company to positive free cash flow.
• Under the restructuring signed on January 27, amortization of the term loan will be replaced with a free cash flow sweep mechanism through April 2024.

TeraWulf, a Bitcoin miner, agreed to restructure its debt in exchange for raising equity financing.

A public share sale garnered $32 million for the company.

Additionally, the company said Thursday that it and its current lenders had signed a legally binding agreement in principle to restructure their debt, subject to the completion of an equity capital raising.

CEO Paul Prager stated:

“In reaching these achievements, we believe more than ever that TeraWulf is positioned to deliver profitable growth and compelling returns. We are confident in our ability to raise additional funds needed to obtain debt relief and committed to creating shareholder value.”

The term loan’s amortization will be replaced with a free cash flow sweep mechanism through April 2024 under the restructuring agreement agreed on January 27. If TeraWulf can raise the necessary amount in equity proceeds by March 15, 2023, it will also be able to postpone the term loan’s maturity date until April 2024.

The mining company previewed a public offering of common shares today, aiming to raise $25 million in total. The closure of the offering is anticipated to occur on or around February 6, 2023, subject to the usual closing requirements.

As the bear market and recent spikes in energy costs have taken a toll on the sector, miners like Bitfarms and Greenidge Generation have paid down or restructured their debt. Those who were unable to restructure their debts initiated Chapter 11 bankruptcy proceedings, sold assets, or were subject to margin calls.

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Harold

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