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Bitcoin mining company Iris Energy (IREN) defaulted it’s equipment loan totaling $103 million

According to accusations made by its lender, Iris Energy (IREN), a company that mines bitcoins, has defaulted on equipment loans totaling $103 million that were held by two special-purpose vehicles (SPV).

According to a Monday filing with the U.S. Securities and Exchange Commission, the reason for the notice of default, which the lender sent to the miner on Nov. 4, is that the business failed to hold “good faith restructuring discussions” for the disputed debt. Iris is being accused of missing payments initially due on October 25 because it allegedly refused to participate in such negotiations, according to the petition on Monday.

The lender is attempting to activate an acceleration clause as a result, which means it is requesting prompt payment of the whole principle amount as well as any accumulated interest, according to the document. According to Iris, it “disagrees” with the claims stated by the lender in the notice dated November 4.

Recall that Iris Energy said on November 2 that the questioned bitcoin mining equipment does not generate enough revenue to pay off the associated financial obligations. The company stated at the time that it would not be able to fulfill its financial obligations to the two SPVs if negotiations to restructure the debt do not result in an agreement by November 8.

According to the corporation, the two loans in question, with principal amounts of $32 million and $71 million as of September 30 respectively, are secured by mining equipment that generates 1.6 exahashes per second (EH/s) and 2.0 EH/s, respectively.

Iris Energy is one of many bitcoin mining companies who are finding it difficult to pay back their debts during current bear market that has seen incentives decline while energy prices soar. The first significant participant to file for Chapter 11 bankruptcy was Compute North in September, and other prominent companies like Core Scientific (CORZ) and Argo Blockchain (ARBK) appeared to be on the verge of insolvency.

A third loan for $1 million, which is also included in the Monday filing and is secured by 0.2 EH/s of miners and held by a wholly owned SPV, also received a distinct warning from the lender regarding a probable event of default.

According to the company, Iris Energy will stop supporting the SPVs financially if a deal to restructure the debt is not reached by Tuesday. This could result in asset foreclosure and default.

The company’s machines are only unaffected by the equipment loans in 2.4 EH/s.

Iris shares are up slightly early on Monday and are currently trading at $2.80 per share.

Written by Newsway

NewsWay reporters are Media employees of the newsway.com.ng vested with the responsibilities of getting informative data from verifiable sources and publishing same undistorted on behalf of the NEWS WAY INFO-TECH which is a parent company that birthed the NewsWay blog.

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