• Bitfarms has paid off a $21 million debt to BlockFi with a one-time cash payment of $7.75 million.
• The repayment released 6,100 miners from the loan’s collateral and reduced the company’s overall debt from $165 million to $25 million.
• This payment is part of Bitfarms’ strategy to reduce its indebtedness, increase liquidity and increase financial flexibility in line with current market conditions.
Bitfarms Pays Off Debt With Single Cash Payment
Bitfarms has settled its outstanding debt of $21 million owed to bankrupt crypto lender BlockFi with a one-time cash payment of $7.75 million, according to a Feb. 9 press statement. The loan repayment freed up over 6000 Bitcoin mining machines Bitfarm had used as collateral and further reduces its total debt obligations from $165 million in June 2022 to $25 million, representing an 85% decrease in less than nine months.
Agreement With BlockFi
The original loan was provided as a part of an equipment finance facility by BlockFi on Feb. 18, 2022 for an amount of $32million. According to the agreement between Bitfarms and BlockFi, the remaining principal and interest were paid off in one transaction.
Strategy To Increase Financial Flexibility
The successful negotiation and settlement furthers Bitfarms initiatives to reduce indebtedness, enhance liquidity and increase financial flexibility in line with today’s market conditions, said Jeff Lucas, chief financial officer at Bitfarms.
Background On BlockFI
Blockfi was one of the most prominent financiers for crypto miners in 2021 – 2022 but now has several bad debts according to Bloomberg reports that it was looking to sell around $160million worth of loans related to miners .
Bitfarm’s successful negotiation and settlement with BlockFI is a testament of their commitment towards increasing financial flexibility by reducing their debt obligations significantly within a short period time