Argo Blockchain Plc 6-K, filed Oct 7, 2022
Argo Blockchain Plc (ARBK)
6-K
2022-10-07
For: 2022-10-07
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Added on
April 05, 2026
About this 6-K
Argo Blockchain Plc filed this 6-K on October 7, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 6-K
_____________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October, 2022
Commission File Number: 001-40816
_____________________
Argo Blockchain plc
(Translation of registrant’s name into English)
_____________________
9th Floor
16 Great Queen Street
London WC2B 5DG
England
(Address of principal executive office)
_____________________
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒
Form
40-F ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ☐
EXHIBIT INDEX
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Exhibit No.
1
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Description
Strategic
Actions to Strengthen the Balance Sheet dated 07 October
2022
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Press Release
7 October 2022
Argo Blockchain plc
("Argo" or "the Company")
Announcement of Strategic Actions to Strengthen the Company's
Balance Sheet
●
Argo signs LOI to amend existing equipment financing
agreement
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Argo plans to sell 3,400 mining machines for cash proceeds of
£6.0 million ($6.8m)
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Argo intends to raise approximately £24 million ($27m) via
Proposed Subscription with a strategic investor
Argo Blockchain plc, a global leader in cryptocurrency mining (LSE:
ARB; NASDAQ: ARBK), is pleased to announce several strategic
actions that are intended to bring in additional capital to the
business and ensure that the Company has the working capital
necessary to execute its current strategy and meet its obligations
over the next twelve months.
As previously reported on 9 September 2022, the
Company has
seen headwinds from the price of both natural gas and electricity
caused by the geopolitical situation in Europe and low levels of
natural gas storage in the United States. These factors, coupled
with the decline in the price of Bitcoin since March 2022 and the
increased mining difficulty, have reduced the Company's
profitability and free cash flow generation.
The Company has been proactive in curtailing operations at its
flagship Helios facility in Dickens County, Texas, during periods
of high power prices and securing a more favourable short term
power purchase agreement ("PPA") with a new electricity provider.
The Company remains optimistic about securing a long term,
low-collateral, fixed price PPA and is continually reviewing its
other expenditures to identify and take additional steps to manage
the Company's costs.
In addition to the Company's measures to reduce costs and preserve
capital, Argo's Board of Directors ("Board") has made the
decision to pursue a combination of financing opportunities to
strengthen the Company's balance sheet. Based on its cost
reductions and the assumed completions of the transactions
described below on the terms set forth in the letters of intent and
presently anticipated timing, the Company believes its working
capital will be sufficient for its present requirements, that is
for at least the next twelve months from the date of this
announcement. The Company and the Board remain of the view that
following these strategic steps, Argo will be both well positioned
and capitalised to endure the current period of market dislocation.
The Board and the Company will continue to closely monitor the
Company's cash needs and available sources of capital.
A.
Amendment to Existing Equipment Financing
Agreement
The
Company has executed a non-binding letter of intent ("NYDIG LOI")
to amend its existing equipment financing agreement with an
affiliate of New York Digital Investment Group LLC ("NYDIG"). This
amendment releases approximately £5.0 million ($5.7 million)
of restricted cash and modifies the amortisation schedule for the
Company's existing loans. The transaction significantly reduces the
Company's debt service payments and links future payments for NYDIG
loans used to finance purchases of digital asset mining equipment
to network mining profitability. In exchange, the Company will
provide NYDIG with an expanded collateral package. The amended
equipment financing agreement is expected to contain customary
covenants for an agreement of its type. The Company and NYDIG
expect to close the amendment within the next few weeks, and a
further announcement will be made in due course.
B.
Sale of Mining Machines
In
addition, the Company has signed an agreement to sell to a third
party 3,400 new in box Bitmain S19J Pro machines, representing ~340
PH/s of total hashrate capacity, for cash proceeds of £6.0
million ($6.8 million). Argo will host these machines for the third
party at Helios pursuant to a hosting services agreement that
includes a profit sharing arrangement.
After accounting for this sale, the Company
expects to achieve a total hashrate capacity of 2.9 EH/s by the end
of October 2022.
C.
Conditional Subscription for Ordinary Shares
The
Company has entered into a non-binding letter of intent with a
strategic investor ("Investor") under which, subject to contract,
due diligence and other customary conditions, the Investor has
agreed to subscribe for approximately 87 million Ordinary Shares at
GBP £0.276 per Ordinary Share for gross proceeds of
approximately GBP £24 million ($27 million) (the
"Subscription").
Assuming
completion of the Subscription, the net proceeds of the
Subscription will be used by the Company for working capital and
general corporate purposes, including capital expenditures in
connection with the continued build out of its flagship Helios
facility in Dickens County, Texas.
Assuming
completion of the Subscription, the Investor will hold 15.46% of
the Company's enlarged issued share capital.
The
Investor will have the right to nominate two new non-executive
directors to the Board, subject to the Company's approval. One of
these new non-executive directors will replace an existing
non-executive director. Following these appointments, the Board
will consist of seven directors.
The
Subscription is limited to the Investor, and this announcement
should not be considered an offer or solicitation to purchase or
subscribe for securities in the United States.
The
Company and Investor expect to complete the Subscription within the
next 30 days, and a further announcement will be made in due
course.
Management Commentary
Peter Wall, Chief Executive at Argo Blockchain, said, "We have
worked relentlessly to create and execute on a strategy that will
support our objective of sustainable growth for the Company," Wall
continued. "We also understand the importance of maintaining
flexibility in our approach in order to respond swiftly to external
factors. We are glad to have a strong relationship with our lender
NYDIG, who has been working with us to provide flexibility and to
help ensure the long term success of the Company."
"Additionally, the sale of the 3,400 Bitmain machines generates
cash in the near term, and the Subscription with a major strategic
investor strengthens the balance sheet while adding significant
expertise in Bitcoin mining and digital asset management to the
Board. After careful consideration, we are convinced that taking
these steps will better position the Company to navigate the
current market conditions and preserve shareholder
value."
Operational Update
The Company's next regular monthly operational update will be
released on Tuesday 11 October 2022.
Consummation of Transactions Under Letters of Intent Subject to
Entry into Definitive Agreements
Argo and the respective parties to the letters of intent described
above intend to negotiate and execute definitive agreements in the
near term. There can, however, be no assurance that any definitive
agreements will be signed or that any transaction will be
consummated. In that circumstance, the Board would review
other financing options, of which there are a number currently
available. Should Argo be unsuccessful in completing any further
financing, Argo would become cash flow negative in the near term
and would need to curtail or cease operations. The Board of
Directors remains confident that the Company will be able to
complete the transactions described in this announcement or failing
that, other financing transactions to provide the Company with
working capital sufficient for its present requirements, that is
for at least the next twelve months from the date of this
announcement.
Inside Information and Forward-Looking Statements
This announcement contains inside information and includes
forward-looking statements which reflect the Company's or, as
appropriate, the Directors' current views, interpretations, beliefs
or expectations with respect to the Company's financial
performance, business strategy and plans and objectives of
management for future operations. These statements include
forward-looking statements both with respect to the Company and the
sector and industry in which the Company operates. Statements which
include the words "remains confident", "expects", "intends",
"plans", "believes", "projects", "anticipates", "will", "targets",
"aims", "may", "would", "could", "continue", "estimate", "future",
"opportunity", "potential" or, in each case, their negatives, and
similar statements of a future or forward-looking nature identify
forward-looking statements. All forward-looking statements address
matters that involve risks and uncertainties because they relate to
events that may or may not occur in the future, including the risk
that the Company may be unable to secure sufficient additional
financing to meet its operating needs. Forward-looking statements
are not guarantees of future performance. Accordingly, there are or
will be important factors that could cause the Company's actual
results, prospects and performance to differ materially from those
indicated in these statements. In addition, even if the Company's
actual results, prospects and performance are consistent with the
forward-looking statements contained in this document, those
results may not be indicative of results in subsequent periods.
These forward-looking statements speak only as of the date of this
announcement. Subject to any obligations under the Prospectus
Regulation Rules, the Market Abuse Regulation, the Listing Rules
and the Disclosure and Transparency Rules and except as required by
the FCA, the London Stock Exchange, the City Code or applicable law
and regulations, the Company undertakes no obligation publicly to
update or review any forward-looking statement, whether as a result
of new information, future developments or otherwise. For a more
complete discussion of factors that could cause our actual results
to differ from those described in this announcement, please refer
to the filings that Company makes from time to time with the United
States Securities and Exchange Commission and the United Kingdom
Financial Conduct Authority, including the section entitled "Risk
Factors" in the Company's Registration Statement on Form
F-1.
For further information please contact:
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Argo Blockchain
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Peter Wall
Chief
Executive
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via Tancredi +44 203 434 2334
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finnCap Ltd
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Corporate
Finance
Jonny Franklin-Adams
Seamus Fricker
Joint
Corporate Broker
Sunila de Silva
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+44 207 220 0500
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Tennyson Securities
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Joint
Corporate Broker
Peter Krens
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+44 207 186 9030
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OTC Markets
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Jonathan Dickson
jonathan@otcmarkets.com
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+44 204 526 4581
+44 7731 815 896
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Tancredi Intelligent Communication
UK
& Europe Media Relations
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Salamander Davoudi
Fabio Galloni-Roversi Monaco
Nasser Al-Sayed
argoblock@tancredigroup.com
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+44 7957 549 906
+44 7888 672 701
+44 7915 033 739
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About Argo:
Argo Blockchain plc is a dual-listed (LSE: ARB; NASDAQ: ARBK)
blockchain technology company focused on large-scale cryptocurrency
mining. With its flagship mining facility in Texas, and offices in
the US, Canada, and the UK, Argo's global, sustainable operations
are predominantly powered by renewable energy. In 2021, Argo became
the first climate positive cryptocurrency mining company, and a
signatory to the Crypto Climate Accord. Argo also participates in
several Web 3.0, DeFi and GameFi projects through its Argo Labs
division, further contributing to its business operations, as well
as the development of the cryptocurrency markets. For more
information, visit www.argoblockchain.com.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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Date:
07 October, 2022
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ARGO BLOCKCHAIN PLC
By:
Name:
Peter Wall
Title:
Chief Executive Officer
Name:
David Zapffe
Title:
General Counsel
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