Argo Blockchain has successfully raised £5.75 million (approximately $7.5 million) through a share offering that saw strong demand from institutional and retail investors.
The London-based crypto mining company sold 51,340,000 new ordinary shares to institutional investors at a price of 10 pence per share and got proceeds of around £5.13 million ($6.64 million). Argo also raised £616,000 ($797,000) from retail investors who purchased 6,160,000 new ordinary shares at the same price, according to an announcement by London Stock Exchange.
Argo had previously planned to issue a minimum of 47,750,000 additional ordinary shares with hopes of raising £4.78 million ($6.18 million). However, due to the high level of interest, the share offering was oversubscribed by both current and potential investors.
Meanwhile, the company has applied for the admission of the new shares to the London Stock Exchange and the Financial Conduct Authority. The approval process is expected to be completed by July 24, 2023.
These newly issued shares represent around 12% of Argo Blockchain’s current issued ordinary share capital. The newly issued shares will hold the same rank as the existing ordinary shares and shareholders are entitled to receive dividends and other distributions declared after the date of issue. Furthermore, the shares will be considered fully paid and credited accordingly.
Notably, following the announcement of the share offering, Argo’s stock has experienced a decline of over 20%.
Argo Blockchain has been navigating profitability challenges and striving to avoid bankruptcy amidst the unpredictable nature of the crypto market. The decline in the value of bitcoin (BTC) over the past year significantly impacted the company’s financial performance.
In December 2022, the company announced the sale of its Helios mining operation to Mike Novogratz’s Galaxy Digital for $65 million. As part of the agreement, Galaxy Digital also extended a $35 million loan to Argo, and the sale of its mining equipment will serve as collateral.
This successful share sale will significantly improve Argo’s financial position. The company plans to use the funds from the share sales to settle its outstanding debts and support its expansion initiatives.
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