(Rejected) Bitcoin Miner Stronghold Digital Mining Announces New Debt Restructuring Plan, Returning 26,000 Rigs to Relieve Debt

U.S.-based bitcoin mining firm Stronghold Digital Mining (SDIG) announced plans for a new debt restructuring agreement on Tuesday.

Under the terms of the agreement with lender New York Digital Investment Group (NYDIG), Stronghold Digital Mining has decided to return 26,000 of its mining equipment, of which 18,700 are currently operating as Bitcoin miners, in an effort to relieve the lender’s outstanding debt on its equipment financing agreement.

Selling off crypto mining equipment will help the company clear a total of $67.4 million in debt.

The company's current second-quarter revenue rose 597% to $29.2 million from $4.2 million in the year-ago quarter and had $47 million in liquidity and $64 million in debt principal outstanding.

Stronghold Digital Mining said power generation capacity remained the same, with a much greater exposure to strong electricity markets, despite a reduction in the mining fleet in the short term.

The company’s hash rate capacity is approximately 2.5 exahash per second (“EH/s”)

Stronghold Digital Mining also signed an agreement with WhiteHawk for an additional loan of $20 million to identify the right opportunity to purchase mining machines.

The co-chairman and CEO of Stronghold Greg Beard stated that：

“By returning miners to NYDIG that served as the collateral for the non-recourse financing agreements and restructuring the WhiteHawk financing agreements and the Convertible Notes, we will be able to eliminate over half of our total principal amount of outstanding debt and the significant associated interest and principal payments.”

He also added that the restructuring will “significantly improve liquidity and flexibility to create equity value through cycles in bitcoin and electricity markets, deploying capital in an opportunistic manner.”

Through a series of new initiatives to restructure its financial business, the company expects to boost cash flow by about $40 million by the end of 2023, according to an official statement.