The latest debt restructuring agreement from Pennsylvania-based Stronghold Digital (SDIG) will defer principal payments on $54.9 million of debt until June 2024.
Under a cash crunch as bitcoin’s bear market combines with soaring energy prices, Stronghold has since last summer struck deals with its lenders to reduce immediate debt as it seeks to avoid the comes out of Chapter 11 of peers like Compute North and Core Scientific (CORZ).
This latest settlement with Whitehawk Finance on $55 million in debt releases the miner from all amortization payments through July 2024, which would otherwise have required the payment of $1.6 million per month (for a total of $29 million through June 2024), according to a Tuesday filing with the U.S. Securities and Exchange Commission.
Additionally, the company will not be required to make any payments until June 2023. From then on, Stronghold will make payments based on a monthly cash sweep calculated at 50% of the company’s average daily cash balance. business for each month over $7.5. million, according to the record.
The new credit agreement also reduces Stronghold’s minimum liquidity covenants until the end of 2024 and allows the miner to pay their interest in kind for up to six months, as long as their average daily cash balance for the respective month is less than $5 million.
Stronghold also signed a two-year deal with miner hosting company Foundry for 4,500 miners, totaling around 420 petahash/second in computing power with an average efficiency of 35 joules/terahash. Lodging costs will be the realized net cost of electricity at Stronghold’s Panther Creek plant plus 10%. Foundry and CoinDesk share the same parent company, Digital Currency Group.
The shares are 5.4% higher in premarket trading at $0.59.
