Home » Bitcoin » Bitcoin Mining Firm Gets Court Approval for $30M Loan Amid Bankruptcy

Bitcoin Mining Firm Gets Court Approval for $30M Loan Amid Bankruptcy

31.08.2024 18:00 2 min. read Alexander Stefanov
SHARE: SHARES
Bitcoin Mining Firm Gets Court Approval for $30M Loan Amid Bankruptcy

Rhodium Enterprises, a Bitcoin (BTC) mining company that recently filed for bankruptcy, has received court approval to secure a loan in US dollars or Bitcoin.

The company has the option to borrow $30 million or 500 BTC from Galaxy Digital. However, the U.S. dollar loan includes a 14.5% annual interest rate, while the Bitcoin loan offers a lower interest rate of 9.5%, according to a Bloomberg report.

With the lender’s consent, Rhodium is allowed to repay the loan in BTC in the form of U.S. dollars using “reasonable published market spot prices” at the time of repayment, provided it occurs before the maturity date.

This approval is notable in the context of bankruptcy financing within the crypto sector, largely due to the volatility of the Bitcoin price, which complicates the task of forecasting the total amount of loan repayment regardless of the interest rate.

On August 24, Rhodium Enterprises voluntarily filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas, citing liabilities of up to $100 million.

The filing included six subsidiaries – Rhodium Encore, Jordan HPC, Rhodium JV, Rhodium 2.0, Rhodium 10MW and Rhodium 30MW. The company’s debts reportedly range between $50 and $100 million, while its total assets are estimated at $100-$500 million.

By electing Chapter 11 bankruptcy, Rhodium Enterprises can restructure its debts while continuing operations. This process allows the company to negotiate a revised repayment plan on new terms.

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.

Telegram

SHARE: SHARES
More Bitcoin News
No Comments yet!

Your Email address will not be published.