Key Points
- Argo Blockchain’s shares increased by 16% after securing a $40 million loan agreement.
- The funding will be used for upgrading Bitcoin mining operations, enhancing the balance sheet, and exploring M&A opportunities.
Argo Blockchain’s shares experienced a 16% increase after the company confirmed a non-binding term sheet for senior secured convertible loans amounting to $40 million.
Funding Details
The company, on March 3, unveiled that it had penned a term sheet on February 25. The agreement includes an initial tranche of $15 million and an additional $25 million spread over 18 months. With this funding, Argo Blockchain intends to boost its Bitcoin mining operations in Quebec, Canada, fortify its balance sheet, and investigate possibilities for mergers and acquisitions.
The loans come with an 8% interest rate and a 25% conversion premium based on Argo Blockchain’s share price prior to the signing. Investors will also receive warrants equal to 30% of the loan amount at a premium price. The identity of the backers remains undisclosed, but the company has stated that the deal is supported by up to three multinational institutional investors. These investors will acquire three board seats once the agreement is finalized and approved by shareholders.
Company’s Perspective
Argo Blockchain’s chairman, Matt Shaw, commented on the funding, stating that the deal will “facilitate profitable growth at Argo and strengthen our balance sheet.” Following the announcement, the company’s shares rose 16% to $0.45 in pre-market trading, as per data from Yahoo Finance.
