Bitcoin Miner Stronghold Restructures Debt On $54.9 Million Loan To Strengthen Liquidity

Key Points:

• Stronghold has reached a new deal with lender WhiteHawk Finance to delay payments and strengthen the company’s liquidity.
• The miner pushes back on mandatory payments until July 2024.

According to Bloomberg, Stronghold has restructured a $54.9 million loan with WhiteHawk Finance and negotiated a two-year hosting agreement with Foundry.

According to a statement, the miner was allowed to postpone any obligatory principle amortization payments (totaling $29 million) until July 2024.

Stronghold intends to repay the principal amount of its outstanding debt with 50% of its average monthly cash balance in excess of $7.5 million beginning in June of this year.

With a lot of hard but necessary work, we have successfully restructured nearly our entire balance sheet to make the Company more resilient, and I am very excited about the next phase for Stronghold. Our efforts to anticipate and respond proactively to challenges in our markets while prioritizing liquidity have helped us endure through this environment. With this amendment and our previously announced convertible debt exchange agreement, which remains on track to close this month, we will have removed all material mandatory principal repayments through the middle of 2024. We believe this puts Stronghold on course to capture significant value from our key markets, power and Bitcoin.

said Greg Beard, co-chairman and CEO of Stronghold.

If Stronghold’s monthly average daily cash balance is less than $5 million, the company may pay interest in kind, which means that interest will be included in the principal. WhiteHawk also has a host of liquidity restrictions for the miner, including staying below a particular debt-to-earnings ratio at the end of each quarter commencing September 30, 2024.

According to the statement, the minimum permissible liquidity, defined as unrestricted cash plus Bitcoin, at any given moment is $2.5 million until March 31, 2024, $5.0 million from April 1, 2024, through December 31, 2024, and $7.5 million thereafter.

Stronghold stated that its new hosting agreement with Foundry supersedes an earlier hosting agreement dated November 7 and comprises a fleet of 4,500 miners. It will also allow Foundry to profit from selling power to the grid when miners are forced to stop working.

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