Will Argo Blockchain Be the Next to Fail ?
Reports have surfaced that Argo Blockchain is engaging in negotiations to sell assets and further to engage in an equipment financing transaction in an effort to prevent the necessity of filing bankruptcy. On December 12, 2022, Argo announced that it is at risk of having insufficient cash to support its ongoing business operations within the next month.
According to the announcement, these negotiations are in the advanced stages and Argo hopes the deals will be concluded prior to a bankruptcy filing necessity. While offering hope of avoiding filing bankruptcy, the announcement specifically states there is no assurance a filing will not be required.
On December 9, 2022, Argo itself inadvertently muddied the waters somewhat regarding it's solvency. That date, certain draft materials for a bankruptcy filing were inadvertently posted to the Argo Blockchain website. This led many to spin that its Chapter 11 filing was imminent. In fact both the London Stock Exchange and Nasdaq suspended trading in Argo stock based on the information posted.
This of course was walked back by Argo and in fact it has yet to file Chapter 11 bankruptcy. Argo reported that London trading had resumed, but no trading data regarding Argo has been published by the London Exchange. Argo had requested the UK Financial Conduct Authority to resume it's trading which is expected as soon as possible.
Argo's troubles were first disclosed in October, 2022, when Argo warned of the risk of it going cash negative in the event it was unable to secure necessary operational capital. Even given the bear market being experienced, Argo reported it sold some of its Bitcoin it had mined in order to make payment on a loan from Galaxy Digital obtained in 2021.
Clearly Argo's back is against the wall. The company must be successful in obtaining necessary capital to avoid the filing of a bankruptcy proceeding.
INFORMATIONAL SOURCES
Argo Blockchain PLC. Restoration of Trading on the London Stock Exchange. (Accessed December 12, 2022).
Hunter, M. Argo Blockchain Bankruptcy Announcement Anticipated. (Accessed December 12, 2022).
Kuruthukulangara, J. Argo Blockchain provides update on liquidity, in advanced talks to sell certain assets. (Accessed December 12, 2022).
Wright, T. Argo Blockchain reports insufficient funds, 'no assurance' it can avoid Chapter 11 bankruptcy. (Accessed December 12, 2022).
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