Argo Blockchain saw its shares surge by over 15% after announcing a significant funding deal worth up to $40 million in senior secured convertible loans.
In a press release on March 3, the cryptocurrency mining firm disclosed that it had signed a non-binding term sheet on February 25, securing an initial $15 million tranche with the potential for an additional $25 million over the next 18 months. The company plans to use the capital to upgrade its Bitcoin mining operations in Quebec, Canada, strengthen its financial position, and explore merger and acquisition opportunities.
The loans come with an 8% interest rate and a 25% conversion premium based on Argo Blockchain’s stock price before the agreement was signed. Investors will receive warrants worth 30% of the loan amount at a premium price. While the identities of the investors are undisclosed, up to three multinational institutional investors are involved. These investors will gain three seats on Argo’s board following the completion of definitive agreements and shareholder approval.
Matt Shaw, chairman of Argo Blockchain, emphasized the positive impact of the deal, stating that it would enable the company to pursue profitable growth while reinforcing its balance sheet. Following the announcement, Argo Blockchain’s shares climbed 16% to $0.45 in pre-market trading, according to data from Yahoo Finance.
Meanwhile, Argo Blockchain’s interim CEO, Jim MacCallum, recently purchased 75,000 company shares through American Depositary Receipts (ADRs) on Nasdaq for about $34,625, with an average price of $0.4617 per share. This insider transaction occurred between January 29 and 30, causing Argo’s shares on the London Stock Exchange to rise by 2.27% to 4.5 GBX. MacCallum’s investment came during a leadership transition following the announcement that CEO Thomas Chippas would step down on February 28, 2024, less than a year after his appointment. MacCallum serves as interim CEO while the company seeks a permanent replacement.
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