Bitcoin mining company Argo plans to restructure to avoid bankruptcy, and its stock price has fallen over 60%.

Gate News bot message, on Monday, Bitcoin mining company Argo Blockchain announced a court-supervised restructuring plan in a last effort to avoid bankruptcy, and its stock price fell by more than 60%.

This mining company listed on the London Stock Exchange and NASDAQ has announced that it has reached an agreement with Growler Mining and will seek approval from the UK courts to implement the proposed plan. If approved, the transaction will eliminate existing shareholders and transfer the majority stake to the mining company Growler Mining located in Tuscaloosa, Alabama.

In recent months, Argo's financial and operational pressures have intensified, and the company pointed out for the first time in its 2024 annual report that there is "significant uncertainty" regarding its ability to continue as a going concern. On Monday, the company stated that the board now views the court-approved restructuring as a necessary alternative to "out-of-control bankruptcy and liquidation."

The proposal also highlights the increasing pressure on the light asset mining model after the Bitcoin halving in April and the long-term contraction of hash prices. Argo is on the verge of bankruptcy, facing similar challenges as Bit Digital, which is currently exiting the Bitcoin mining business to shift towards Ethereum staking.

As part of the proposed restructuring, Growler will provide Argo with a $7.5 million secured loan to cover operational and professional costs during the restructuring process. The loan has a minimum interest rate of 10% and can be converted into equity if the restructuring plan is finalized. Growler also commits to injecting $25 million to $30 million in crypto assets into Argo's U.S. subsidiary, along with additional "exit capital" to supplement business capital and support ongoing financing needs.

Source: The Miner Mag