Iris Energy Faces $103M Loan Default Claims From Lenders

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Iris Energy Co-CEO; Photo Source: Sydney Morning Herald

Due to tough market conditions, Bitcoin miner, Iris Energy, is facing a cash flow crisis. The firm is facing default claims from its lenders, alleging that Iris Energy has defaulted on $103 million of equipment loans. 

In a new filing with the US Securities and Exchange Commission (SEC), its lenders issued a notice of default to the mining firm concerning its two wholly-owned special purpose vehicles of the Company (the “Non-Recourse SPVs”).

The notice alleges that Iris Energy failed to engage in good faith restructuring discussions for certain payments, extended to November 8. 

As a result, the lenders believe such action is considered a payment default for the scheduled principal payments, initially due on October 25, and accrued and unpaid interest on the loan.



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However, Iris Energy disagrees with the allegations in the Purported Acceleration Notice. As stated by the company, 3 Non-Recourse SPVs (facilities) are in debt. They are the $1 million, $32 million, and $71 million worth of equipment financing loans secured by 0.2 exahash per second (EH/s), 1.6 EH/s, and 2.0 EH/s of Bitcoin miners.

But,  2.4EH/s of miners and the Groups’ data center and capacity are not affected by the limited recourse equipment financing arrangements or the alleged notice.

The miner stated that the Non-Recourse SPVs would continue to engage with the lender to modify each facility's terms. 

Recall that in a November 2 press release by Iris Energy, the firm stated,

“Unless a suitable agreement is reached with the lender on modified terms for both equipment financing arrangements, the Group does not intend to provide further financial support to Non-Recourse SPV 2 and Non-Recourse SPV 3.”

Several factors, such as high electricity costs, lower Bitcoin prices, and increasing network difficulty, have greatly affected Iris Energy. Although the firm has $53 million in cash and generates about $8.7 million a month, its monthly gross profit is only $2M. This is below the monthly principal and interest payments of $7M. 

Chiagoziem Bede Ikwueze

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Due to tough market conditions, Bitcoin miner, Iris Energy, is facing a cash flow crisis. The firm is facing default claims from its lenders, alleging that Iris Energy has defaulted on $103 million of equipment loans. 

In a new filing with the US Securities and Exchange Commission (SEC), its lenders issued a notice of default to the mining firm concerning its two wholly-owned special purpose vehicles of the Company (the “Non-Recourse SPVs”).

The notice alleges that Iris Energy failed to engage in good faith restructuring discussions for certain payments, extended to November 8. 

As a result, the lenders believe such action is considered a payment default for the scheduled principal payments, initially due on October 25, and accrued and unpaid interest on the loan.



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Subscribe to our newsletter to get tips, our favorite services, and the best deals on Bitcompare-approved picks sent to your inbox


However, Iris Energy disagrees with the allegations in the Purported Acceleration Notice. As stated by the company, 3 Non-Recourse SPVs (facilities) are in debt. They are the $1 million, $32 million, and $71 million worth of equipment financing loans secured by 0.2 exahash per second (EH/s), 1.6 EH/s, and 2.0 EH/s of Bitcoin miners.

But,  2.4EH/s of miners and the Groups’ data center and capacity are not affected by the limited recourse equipment financing arrangements or the alleged notice.

The miner stated that the Non-Recourse SPVs would continue to engage with the lender to modify each facility's terms. 

Recall that in a November 2 press release by Iris Energy, the firm stated,

“Unless a suitable agreement is reached with the lender on modified terms for both equipment financing arrangements, the Group does not intend to provide further financial support to Non-Recourse SPV 2 and Non-Recourse SPV 3.”

Several factors, such as high electricity costs, lower Bitcoin prices, and increasing network difficulty, have greatly affected Iris Energy. Although the firm has $53 million in cash and generates about $8.7 million a month, its monthly gross profit is only $2M. This is below the monthly principal and interest payments of $7M. 

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Chiagoziem Bede Ikwueze