Argo creditor Growler obtained 87.5% equity in the mining company through a debt swap.

CN
9 hours ago

Argo Blockchain's largest creditor, Growler Mining, is taking control of the struggling cryptocurrency mining company through a debt-to-equity swap, with existing shareholders retaining only a small portion of the company's equity.

According to restructuring documents filed under UK company law, Growler will convert approximately $7.5 million of secured loans into equity and provide new funding in exchange for 87.5% of Argo's equity post-restructuring.

Holders of Argo's $40 million unsecured notes will collectively receive 10%, while existing shareholders will retain only 2.5%. This transaction is part of a court-supervised restructuring plan (codenamed Project Triumph) aimed at preventing bankruptcy and preserving the mining company's listing on Nasdaq.

"Unless the plan company (Argo) implements a balance sheet restructuring, the plan company will be unable to obtain the necessary funding and will face bankruptcy based on cash flow and balance sheet," Argo stated.

Argo will also be delisted from the London Stock Exchange, ending its six-year journey as one of the few publicly traded cryptocurrency companies in the UK. Its shares will continue to trade on Nasdaq, provided the company meets compliance conditions, including plans for a reverse stock split before January 2026.

The company remains registered in London and has its headquarters there, but its capital market focus will completely shift to the United States. In 2018, Argo became the first cryptocurrency company to list on the London Stock Exchange, raising approximately $32 million at a valuation of $61 million.

Documents show that Argo's Bitcoin (BTC) production has significantly declined over the past two years, dropping from nearly 6 coins per day in 2022 to just 2 coins per day in 2024, as aging machinery and high energy costs severely weakened profitability.

The mining company has sold its Helios facility in Texas to Galaxy Digital, with operations now focused on the Baie-Comeau site in Canada and hosting centers in Tennessee and Washington.

Growler's acquisition plan includes injecting new capital (referred to as "exit capital") and transferring ownership of Growler USCo (a subsidiary with new mining assets) to Argo in exchange for new shares. This move gives the creditor operational control and the ability to update its aging mining equipment before Argo's outdated equipment is scrapped in 2026.

If approved by the High Court of England and Wales, this restructuring will eliminate most of Argo's debt burden, save its Nasdaq listing status, and transfer control of the company to creditors. For investors, this is almost a complete wipeout, marking the end of Argo's era as a pioneer of cryptocurrency in the UK public market.

Related: Bolivia's new president supports using blockchain to address government corruption issues

Original article: “Argo creditor Growler acquires 87.5% stake in the mining company through debt swap”

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