Bitfarms Ltd., a global Bitcoin self-mining company, entered into an equipment financing agreement, with initial funding of US$37 million, with NYDIG ABL LLC (NYDIG). In addition, the company reduced its $100 million Bitcoin (BTC)-backed credit facility with Galaxy Digital LLC (Galaxy) by $34 million to $66 million via the sale of 1,500 of its BTC holdings.
“We have proactively taken non-dilutive strategic actions to increase our financial liquidity and flexibility during this period of macroeconomic crypto challenges,” said Jeff Lucas, Chief Financial Officer of Bitfarms. “Now we are better positioned to opportunistically consider potential farm expansion or acquisitions that arise as a result of recent market conditions. Our strategy supports our focus on driving operational excellence and maintaining our position as one of the lowest cost producers in the industry.”
NYDIG $37 Million Equipment Financing Facility
The NYDIG equipment financing agreement provides non-dilutive funding of Bitfarms’ miners to support growth in Quebec. The agreement provides equipment financing at an interest rate of 12 percent per annum collateralized by the miners at the company’s Leger and Bunker facilities, funded as the assets are installed and become operational.
Initial funding of $37 million, or $36 million net of closing fees of $740,000, has been completed with additional fundings contemplated (not committed) in July and October 2022 as construction continues at the Bunker and more equipment is installed.
This latest equipment financing is distinct from Bitfarms’ previously announced $32 million equipment financing agreement with BlockFi Lending LLC.
Bitfarms Reduces $100 Million BTC-Backed Credit Facility to $66 Million
Bitfarms elected to reduce its $100 million BTC-backed credit facility to $66 million, funded through the sale of 1,500 BTC. Borrowings under this credit facility stand at US$66 million as of June 15, 2022.
This facility, which the Company entered into with Galaxy on December 30, 2021, expires on June 30, 2022. Bitfarms and Galaxy are in discussions to renew the facility upon expiration.
“In addition to lowering our interest expense, this $34 million reduction in borrowing gives us the ability to utilize more of our BTC holdings strategy as it frees up BTC that would otherwise be used to collateralize this credit facility,” concluded Lucas.
Bitfarms is managing its growth and capital expenditures in light of recent volatility in the cryptocurrency markets. Bitfarms is in compliance with all its credit obligations. Expansion plans for mining operations and equipment, as well as the use of existing loan facilities, the preservation of existing BTC inventory and sales under the Company’s at-the-market offering are under review in a customary and prudent manner.