By Geoffrey Smith
Investing.com -- Shares in Argo Blockchain (LON:ARB) slumped on Friday after the U.K.-based cryptocurrency miner said it would raise capital and sell a swath of its mining equipment to shore up its balance sheet.
Argo said the measures were necessary to ensure it has enough working capital for the next 12 months, after having to absorb both a sharp rise in electricity prices and a drop in revenue this year due to the fall in crypto prices.
Argo stock in London fell to its lowest in nearly two years at 28.02 pence, before recovering a little to trade at 30 pence by 06:00 ET (10:00 GMT), still down 14.7% on the day.
Argo said it will sell 87 million shares to a still-unnamed investor at a price of 27.6 pence, raising £24 million to tide it over the next year. It expects to complete the deal and name the investor within the next month.
In addition, the company said it will also raise another £6 million by selling nearly 12% of its mining computers to third parties. It will continue to host the computers at its facility in Texas, however. That will reduce its overall mining capacity to some 2.9 EH/s.
"We are convinced that taking these steps will better position the Company to navigate the current market conditions and preserve shareholder value," chief executive Peter Wall said.