REG - Argo Blockchain PLC - Restructuring and Directorate Change

Argo BlockchainAnnouncement

Mon 07:45

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250630:nRSd9370Oa&default-theme=true

RNS Number : 9370O  Argo Blockchain PLC  30 June 2025

Press Release

30 June 2025

Argo Blockchain plc

("Argo" or "the Company")

Proposed Restructuring and Directorate Change

Restructuring

Argo Blockchain plc (LSE: ARB; NASDAQ: ARBK) announces a proposed
restructuring to resolve its short and medium term capital needs.

On 9 May 2025, the Company announced its results for the year ended 31
December 2024.  The reports and accounts noted that "a material uncertainty
exists that may cast significant doubt on the group's and company's ability to
continue as a going concern."

The Company has actively been exploring solutions to address its capital
structure and liquidity position. Following a review of the available and
deliverable options with its legal and financial advisors, Argo is now
proposing to implement a restructuring through a restructuring plan to be
sanctioned by the High Court of England and Wales or other court in England
and Wales of competent jurisdiction ("Court") under Part 26A Companies Act
2006 ("Restructuring Plan").

Argo and Growler Mining, LLC n/k/a Growler Mining Tuscaloosa, LLC ("Growler")
have entered into a restructuring plan support agreement under which Growler
has agreed to provide a senior secured multi-draw term loan to Argo ("Loan")
for the purposes of providing working capital to Argo and its subsidiaries and
to assist Argo to implement a financial restructuring which the board has
concluded is necessary to avoid an uncontrolled insolvency and liquidation of
Argo and its subsidiaries ("Restructuring").

Key terms of the Restructuring Plan

Under the Restructuring Plan, it will be proposed that:

1.             the Loan will, at Growler's election, be paid in
full in cash or fully converted into newly issued common stock (or ordinary
shares) in Argo on the Effective Date of the Restructuring Plan (as defined
below);

2.             subject to sanction by the Court of the
Restructuring Plan, Growler will contribute crypto assets with a book value of
US$25-30m to Argo Operating US LLC ("Argo US"), a wholly owned subsidiary of
the Company, in exchange for all common stock or membership interests in Argo
US, and, following that, Growler will contribute all of its equity or
membership interests in Argo US to the Company in exchange for additional new
equity in Argo;

3.             Argo's bond holders (which collectively hold bonds
with a face value of approximately $40 million in the aggregate) will receive
new common stock in Argo in full and final satisfaction of their claims and in
accordance with the terms of the Restructuring Plan;

4.             following conversion of its Loan (if applicable),
issue of shares in in Argo in exchange for its contribution of all equity or
membership interests held in Argo US, and the exit capital to be provided to
Argo upon the Effective Date of the Restructuring Plan in exchange for
additional new equity in Argo (as set forth below), it is envisaged that
Growler would be left with at least 80% of the issued shares of the Company,
with the exact proportions to be determined by reference to the value of its
Loan, the assets contributed, and the exit capital provided. It is envisaged
that bond holders would be left with the remaining equity, with existing
equity holders in Argo having their shares cancelled and extinguished on the
Effective Date and entitled only to a compromise Restructuring Plan payment in
a nominal amount based on their pro rata holdings of shares; and

5.             on the Effective Date of the Restructuring Plan,
Growler will provide additional cash funding to Argo (the "Exit Capital") in
exchange for further new Argo equity to ensure that, among other things, all
payments required under the Restructuring Plan are made; the Company is
sufficiently capitalised for a company of its type, industry and size to move
forwards; the Company has funding for go-forward working capital needs.

The Restructuring Plan will likely result in the Company's admission to the
Main Market being cancelled.  It is Argo's intention to maintain the
Company's Nasdaq listing.

The Loan

The Loan will be a secured multi-term term loan facility in an amount up to
$7,500,000, with amounts available to be drawn down against an approved
budget. The Loan will be interest bearing at SOFR plus 6% per annum (with a
minimum interest rate of 10% per annum), with a 1.5% commitment fee and a 1.5%
exit fee. The Loan will be secured by an "all assets" fixed and floating
charge in favour of Growler, which shall include, without limitation, the
equity interests in the subsidiaries of the Company. At Growler's discretion,
one or more of the subsidiaries of the Company are required to grant to
Growler a first ranking lien over their assets and property in support of the
Loan.  The purpose of the Loan is to fund Argo's operations until the
Effective Date of the Restructuring Plan (as explained below) and to meet
professional fees and other costs necessarily incurred to implement the
Restructuring Plan. Growler may, at its election, convert the Loan into equity
upon sanction and implementation of the Restructuring Plan.

Company Subsidiaries and Operating Expenses

All of Argo's subsidiaries' respective assets and properties including,
without limitation, all mining machines, furniture, fixtures, and equipment
wherever located including those located at properties owned by the
subsidiaries, including, without limitation, the Baie-Comeau facility, or that
are otherwise located at a hosting site in the United States shall remain
wholly owned, directly or indirectly, by the Company.  All operating expenses
and lender or vendor claims of the subsidiaries shall be paid in the ordinary
course during the Restructuring Process out of the proceeds of the Loan and
the Exit Capital, as the case may be, with all such expenses and payments to
be made included in the approved budget.

The Court process

The implementation of the Restructuring Plan will be subject to the approval
of the Court and will include the following steps:

·      an initial explanation of the main terms of the Restructuring
Plan and proposed meetings of creditors and members (or classes of either of
them) ("Practice Statement Letter") will be sent to affected creditors and
members;

 

·      an application will be made to Court to approve the composition
of classes of creditors and, if appropriate, members and the convening of
meetings of such persons to consider the Restructuring Plan, proposed in the
Practice Statement Letter ("Convening Hearing");

 

·      meetings of creditors and if appropriate, members (or classes of
them) will be convened in accordance with terms approved by the Court in the
Convening Hearing. A detailed explanation of the terms of the Restructuring
Plan will be sent to affected creditors and members with the notices convening
meetings of them ("Explanatory Statement");

 

·      the meetings of creditors and, if appropriate, members, will seek
the approval of the Restructuring Plan and will be deemed to have approved the
Restructuring Plan if approved at such meetings by 75% by value of such
creditors (and, if appropriate, members);

·      the Court will then be asked to sanction the Restructuring Plan
("Sanction Hearing"). If the Restructuring Plan has not been approved by all
meetings of creditors and, if appropriate, members, convened in accordance
with the orders of the Court in the Convening Hearing, the Court may, in its
discretion, still sanction the Restructuring Plan if satisfied that (a) the
Restructuring Plan has been approved by at least one "in the money" class of
creditors or members; and (b) any dissenting class is not worse off under the
proposed plan than it would be in the relevant alternative ("Relevant
Alternative"). The Explanatory Statement will contain a detailed analysis of
the Relevant Alternative, but it is likely to be formal insolvency of Argo
(that is liquidation or administration), which will return far less to
creditors of Argo than is believed to be the case under the Restructuring
Plan, and nothing for members; and

·      shortly after the order of the Court in the Sanction Hearing
("Sanctions Order"), Argo will file the Sanctions Order at Companies House
(the English companies registry) on which event the Restructuring Plan will be
effective and bind all affected creditors and members ("Effective Date").

It is expected that the Restructuring Plan will be presented to the Court by
29 August 2025 and, if sanctioned by the Court, the Effective Date will be
before 30 November 2025.

Takeover Code

The implementation of the Restructuring Plan will result in Growler acquiring
interests in shares carrying more than 30% of the Company's voting rights.
Under the UK Takeover Code, Growler's acquisition would trigger an obligation
on Growler to make a mandatory offer to the remaining shareholders in Argo.
The Restructuring Plan is, therefore, conditional upon the Takeover Panel
agreeing to a waiver of the obligation under Rule 9 to make a mandatory offer,
subject to independent shareholders approving that waiver. If shareholders do
not approve the Restructuring Plan and a Rule 9 waiver, Argo intends to seek
the sanction of the Restructuring Plan by the Court on the basis that
shareholders would be no worse off under the Plan than the Relevant
Alternative (see above).   In these circumstances, Argo also intends to
apply to the Panel to request that the Panel permit a dispensation under
section 2(c) of the Introduction of the UK Takeover Code from the obligation
that would otherwise arise on Growler to make a mandatory offer under Rule 9
in order to facilitate the rescue of Argo which is in serious financial
difficulty.

No assurance of definitive agreements

There can be no assurance that any definitive agreements for the Restructuring
Plan will be signed or that the Restructuring Plan will be consummated. Should
Argo be unsuccessful in completing the Restructuring Plan, it is likely that
Argo will need to enter into a formal insolvency process.

Directorate Change

Matthew Shaw has resigned from his position as Chairman and Director of the
Company with effect from 27 June 2025. The Board wishes to thank Mr. Shaw for
his service and contribution to the Company during his tenure and wishes him
well in his future endeavours.

The Company is pleased to announce the appointment of Maria Perrella,
currently serving as a Non-Executive Director, as Chair of the Board with
immediate effect.

Justin Nolan, Chief Executive Officer, said, "This transaction is the
culmination of a months-long process designed to preserve Argo's operations
and maximize value for Argo's stakeholders. The Restructuring Plan gives Argo
a clear path forward with a significantly deleveraged balance sheet and a
long-term strategic investor in Growler."

This announcement contains inside information.

For further information please contact:

 Argo Blockchain
 Investor Relations                  ir@argoblockchain.com (mailto:ir@argoblockchain.com)
 Tennyson Securities
 Corporate Broker                    +44 207 186 9030

 Peter Krens
 Fortified Securities
 Joint Broker                        +44 7493 989014

 Guy Wheatley, CFA                   guy.wheatley@fortifiedsecurities.com
 Tancredi Intelligent Communication   argoblock@tancredigroup.com

 UK & Europe Media Relations

 About Argo:

Argo Blockchain plc is a dual-listed (LSE: ARB; NASDAQ: ARBK) blockchain
technology company focused on large-scale cryptocurrency mining. With a mining
facility in Quebec and offices in the US, Canada, and the UK, Argo's global,
sustainable operations are predominantly powered by renewable energy. In 2021,
Argo became the first climate positive cryptocurrency mining company, and a
signatory to the Crypto Climate Accord. For more information, visit
(http://www.argoblockchain.com/) www.argoblockchain.com
(http://www.argoblockchain.com/) .

Forward looking statements

This announcement contains "forward-looking statements," which can be
identified by words like "may," "will," "likely," "should," "expect,"
"anticipate," "future," "plan," "believe," "intend," "goal," "seek,"
"estimate," "project," "continue" and similar expressions. Forward-looking
statements are neither historical facts nor assurances of future performance.
Instead, they are based only on the Company's current beliefs, expectations
and assumptions regarding the future of its business, future plans and
strategies, projections, anticipated events and trends, the economy and other
future conditions. Because forward-looking statements relate to the future,
they are subject to inherent uncertainties, risks and changes in circumstances
that are difficult to predict and many of which are outside of the Company's
control. The information in this announcement about future plans and
objectives of the Company are forward-looking statements. Therefore, you
should not rely on any of these forward-looking statements. Important factors
that could cause the Company's actual results and financial condition to
differ materially from those indicated in the forward-looking statements
include, market and other conditions, the principal risks and uncertainties
listed in the risk factors set forth in our Annual Report and Financial
Statements and Form 20-F for the year ended 31 December 2024.

 

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDQBLBXEQLZBBF