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Power / Energy

Greenidge Completes Expansion of South Carolina Mining Facility to 44 MW

by Greenridge on

Greenidge Generation Holdings Inc. (NASDAQ: GREE) (“Greenidge” or the “Company”), a vertically integrated cryptocurrency datacenter and power generation company, today announced the completion of an expansion of their South Carolina mining facility to 44 MW of mining capabilities and its intention to enter into agreements to eliminate all of Greenidge’s secured debt obligations via the transfer to certain affiliates of NYDIG ABL LLC (“NYDIG”) of the expanded mining facilities in Spartanburg, South Carolina and the approximate 25 acre parcel on which the mining facilities are located. Greenidge will retain approximately 150 acres of land in Spartanburg for possible future data center development. Greenidge also announced its financial and operating results for the second quarter of 2023.

In January, Greenidge, NYDIG and B. Riley Commercial Capital, LLC (“B. Riley”) announced a significant restructuring of Greenidge’s secured debt, and today’s announcement and eventual elimination of Greenidge’s remaining secured debt builds on the terms established in January’s agreement. On July 20, 2023, NYDIG purchased the Secured Promissory Note from B. Riley (the “Secured Promissory Note”), following Greenidge’s principal payment to B. Riley that reduced the balance to approximately $4.1 million. In recognition of the capital expenditures required to be made by the Company to expand and upgrade the South Carolina facility, and in anticipation of the transfer of the South Carolina mining facilities to certain affiliates of NYDIG, NYDIG has provided a limited waiver to the covenant in NYDIG’s Senior Secured Loan (the “Senior Secured Loan”) requiring that the Company maintain a $10 million minimum cash balance, reducing that minimum cash balance to $6 million through August 21, 2023, and an intention to amend the Senior Secured Loan on or prior to August 21, 2023 to reduce the minimum cash balance covenant to $6 million until the earlier of December 29, 2023 or the completion of the sale transaction; provided that the minimum cash balance covenant shall reset to $10 million if the sale transaction is not completed by December 29, 2023. Upon completion of the sale transaction, of which there can be no assurances, in addition to the elimination of Greenidge’s secured debt, the Company will also receive the payments outlined below which will replenish the Company’s cash reserves.

“In the first seven months of 2023, we’ve cleared $63.5 million in secured debt, and once the South Carolina sale is complete, we will have eliminated all of Greenidge’s remaining $21.8 million secured debt, leaving $72.2 million of unsecured debt upon closing, which does not mature until 2026. We also continue to operate a robust, advanced mining operation that is poised to compete as bitcoin mining enters its next phase,” said Dave Anderson, Chief Executive Officer of Greenidge. “NYDIG and B. Riley have been extraordinary, collaborative partners who have been willing to work together to find mutually beneficial solutions. Once these debts are behind us, we will have improved our near-term liquidity putting us in far better position to continue to build a great company for the long-term.”

KEY DETAILS OF THE SOUTH CAROLINA FACILITIES SALE

Following the January agreement with NYDIG and B. Riley, Greenidge owed approximately $17.2 million in secured debt to NYDIG and $8.7 million to B. Riley. Subsequently, NYDIG chose not to exercise its rights to a post-closing covenant, which caused approximately $0.5 million of interest to be capitalized into the debt balance as of April 30, 2023. The terms of a non-binding term sheet indicating the intention to enter into the sale agreement are as follows:

  • Greenidge Receives
    • Discharge of the approximately $17.7 million outstanding principal under the Senior Secured Loan to NYDIG
    • Discharge of the approximately $4.1 million outstanding principal under the Secured Promissory Note that NYDIG purchased from B. Riley
    • Approximately $4.9 million in cash, less accrued interest under the Secured Promissory Note and Senior Secured Loan and certain transaction costs of NYDIG
    • Up to approximately $2.6 million in potential bonus payments tied to the completion date and uptime performance of the mining facility
    • No further payments of interest or principal in respect of the Secured Promissory Note or the NYDIG Senior Secured Loan until the closing of the sale, as the limited waiver discussed above also contemplates that the loan agreements with respect to the Secured Promissory Note and the NYDIG Senior Secured Loan will be amended on or before August 21, 2023, to extend the limited waiver regarding the reduced $6 million cash requirement to December 29, 2023, as well as provide that the Company will not be required to make any principal or interest payments associated with the outstanding secured debt prior to the closing of the transaction and provided that the transaction closes on or before December 29, 2023.
  • NYDIG Receives
    • The expanded and upgraded mining infrastructure at Greenidge’s facility in South Carolina (44 MW) and the approximate 25 acres of land on which the facility is located
    • Transition Services Agreement

Additionally, as an interim measure until the sale closes, Greenidge and NYDIG have expanded their hosting agreement to include the additional 26 MW of infrastructure.