Hut 8 Mining Strengthens Balance Sheet With US$20.0 Million Loan Repayment
Hut 8 Mining (TSX: HUT) is looking to strengthen its balance sheet, announcing this morning that it has finalized plans to repay an outstanding loan. The loan, which currently sits at US$20.0 million, is currently held by Genesis Global Capital.
The repayment of the loan, which is to occur in mid-February following a mandatory one-month repayment notice, will see the company reduce capital expenditures by US$1.6 million per year due to the reduced interest expense. The repayment will also see the company generate US$0.8 million in interest income.
This income is a function of the original justification for its loan. The loan effectively enabled the company to hold a larger bitcoin balance, while using its bitcoin as collateral for the loan. With bitcoin appreciating more than the 8% per annum interest on the loan, the strategy worked well for the company. That bitcoin previously used as collateral however will now instead be used in a yield account, which is expected to generate income of US$0.8 million per year.
The repayment of the loan follows the company securing $77.5 million via a financing conducted with several US institutions.
Hut 9 Mining last traded at $4.98 on the TSX.
Information for this briefing was found via Sedar and Hut 8 Mining Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
