Greenidge Generation Restructures $74.4M Debt with NYDIG

• Greenidge Generation, a bitcoin miner in New York, has reached a restructuring agreement with its lender, NYDIG, to reduce its $74.4 million debt.
• NYDIG will purchase 2.8 exahash per second (EH/s) of Greenidge’s bitcoin miners and host them, eliminating $57-$68 million of debt.
• The company had an average monthly cash burn rate of $8 million in October and November 2022, of which $5.5 million was associated with principal and interest payments to NYDIG.

Greenidge Generation, a bitcoin miner based in New York, has recently come to a restructuring agreement with its lender, NYDIG, in order to reduce its $74.4 million debt. The agreement includes the purchase of 2.8 exahash per second (EH/s) of Greenidge’s bitcoin miners by NYDIG, which will be hosted by Greenidge. This purchase will eliminate $57-$68 million of debt, leaving Greenidge with approximately 1.8 EH/s of its own miners, while requiring that the mining firm also pledge the rest of its unencumbered assets to secure the remainder of the loan.

The debt restructuring comes at a difficult time for Greenidge and other bitcoin miners, who have been hit hard by the recent drop in the price of bitcoin. Many miners had large orders fulfilled in the bull market and new hash rate contributions, but are now left with bitcoin holdings whose value has plummeted. In effect, miners have mined high and sold low.

To compound the difficulty of the situation, Greenidge’s average monthly cash burn rate during October and November 2022 was approximately $8 million, of which approximately $5.5 million per month was associated with principal and interest payments to NYDIG. This rate is expected to remain consistent for the month of December 2022, leaving Greenidge with limited time to turn things around. Without the restructuring, Greenidge would have been in danger of running out of money by March 2023.

The restructuring agreement will give Greenidge the breathing room it needs to continue its operations. However, it is important to note that the agreement only addresses the immediate financial difficulty and does not provide a long-term solution. For that, Greenidge must find ways to increase its revenue and reduce its costs in order to ensure future sustainability.