Argo Blockchain PLC Announces £7.8 million ($9.9 million) Placing

Rhea-AI Summary

Argo Blockchain plc (ARB) Raises $9.9 Million in Gross Proceeds Through Private Placement, Plans to Use Funds for Working Capital and Debt Repayment

Financial Analyst

The recent capital raise by Argo Blockchain through the issuance of new ordinary shares is a strategic move that merits attention from a financial perspective. The gross proceeds of £7.8 million ($9.9 million) aim to bolster the company's working capital, enable debt repayment and support general corporate purposes. The placement was executed at a price per share that reflects a discount to the recent volume-weighted average price (VWAP) and closing mid-price, which is a common practice to incentivize institutional investors.

The dilution effect, with the new shares accounting for approximately 7.06% of the pre-placement share capital, could potentially impact existing shareholders' value. However, the infusion of capital might be necessary for sustaining operations and pursuing growth strategies in the volatile cryptocurrency market. The immediate liquidity may also improve the company's financial health, potentially offsetting the dilution concern in the long-term.

Investors will need to monitor the deployment of the raised funds and the company's subsequent financial performance to assess the efficacy of this capital raise. The company's ability to manage its increased capital in a way that generates returns above the cost of capital will be crucial for long-term valuation.

Market Research Analyst

From a market perspective, Argo Blockchain's placement is indicative of the ongoing capital needs within the cryptocurrency mining industry. The sector is capital-intensive, requiring continuous investment in hardware and energy resources to remain competitive. The discount on the share price could reflect current market sentiment towards risk in the cryptocurrency sector and the necessity for miners to secure funding amidst market uncertainties.

Additionally, the decision to limit the placement to certain institutional investors suggests a targeted approach to fundraising, possibly aimed at investors with a deeper understanding of the industry's risks and long-term potential. This could be a strategic move to align with stakeholders who can provide not just capital but also stability during market fluctuations.

The market's reception of the new share issuance and the subsequent trading performance will provide insights into investor confidence in Argo Blockchain's strategy and the overall health of the cryptocurrency mining sector.

Legal Expert

The disclosure of inside information in Argo Blockchain's announcement is a critical legal aspect of this capital raise. Compliance with the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rules is essential for maintaining transparency and trust with shareholders and the market at large. The company's clear communication about the total voting rights post-placement ensures that shareholders are informed about their relative influence after the dilution.

The legal framework governing such transactions aims to protect investors and maintain orderly markets. Argo Blockchain's adherence to these regulations, including the application for the new Ordinary Shares to be admitted to the Official List and to trading on the London Stock Exchange, underscores the company's commitment to regulatory compliance and corporate governance standards.

Investors should be aware of the legal implications of such capital raises, including the rights pertaining to the new shares, which rank pari passu with the existing shares, ensuring equal treatment among shareholders.

LONDON, ENGLAND / ACCESSWIRE / January 8, 2024 / Argo Blockchain plc, a global leader in cryptocurrency mining (LSE:ARB)(NASDAQ:ARBK), is pleased to announce it has raised, subject to Admission, gross proceeds of £7.8 million ($9.9 million) by the issue of 38,064,000 new ordinary shares of £0.001 each in the Company ("Ordinary Shares") at a price per share of £0.205 to certain institutional investors (the "Placing"). The Placing price represents a discount of approximately 1 per cent to the 30 trading day VWAP of the Company's existing ordinary shares for the period ended on 5 January 2024, and a discount of approximately 24 per cent to the closing mid-price of the Company's ordinary shares on 5 January 2024. The new Ordinary Shares being issued represent approximately 7.06 per cent of the existing issued ordinary share capital of the Company prior to the Placing.

The net proceeds of the Placing are expected to be used by the Company for working capital, the repayment of indebtedness, and for general corporate purposes. The Placing is limited to those certain institutional investors that have already subscribed and this announcement should not be considered an offer or solicitation to purchase or subscribe for securities in the United States.

The new Ordinary Shares will rank pari passu with the existing Ordinary Shares in issue and application will be made for the new Ordinary Shares to be admitted to the Official List and to trading on the Main Market of the London Stock Exchange PLC. Admission is expected to occur, and dealings in the new Ordinary Shares commence, on 11 January 2024.

Tennyson Securities (a trading name of Shard Capital Partners LLP) acted as the Company's agent for the Placing.

Total Voting Rights

Following both the Private Placement Admission and the previously announced PSU Admission, the Company will have a total of 577,001,363 Ordinary Shares in issue. No Ordinary Shares are held in treasury. The above figure may be used by the Company's shareholders as the denominator for the calculations by which they can determine whether they are required to notify their interest in, or a change of their interest in, the Company under the FCA Disclosure Guidance and Transparency Rules.

This announcement contains inside information.

For further information please contact:

Argo Blockchain
Investor Relations	ir@argoblockchain.com
Tennyson Securities
Corporate Broker Peter Krens	+44 207 186 9030
Fortified Securities
Joint Broker Guy Wheatley, CFA	+44 7493 989014 guy.wheatley@fortifiedsecurities.com
Tancredi Intelligent Communication UK & Europe Media Relations	argoblock@tancredigroup.com

About Argo:

Argo Blockchain plc is a dual-listed (LSE: ARB; NASDAQ: ARBK) blockchain technology company focused on large-scale cryptocurrency mining. With mining facilities in Quebec, mining operations in Texas, and offices in the US, Canada, and the UK, Argo's global, sustainable operations are predominantly powered by renewable energy. In 2021, Argo became the first climate positive cryptocurrency mining company, and a signatory to the Crypto Climate Accord. For more information, visit www.argoblockchain.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

SOURCE: Argo Blockchain PLC

View the original press release on accesswire.com

What is the recent announcement from Argo Blockchain plc (ARB)?

Argo Blockchain plc (ARB) has raised gross proceeds of $9.9 million through a private placement of 38,064,000 new ordinary shares.

How will the proceeds from the private placement be used?

The net proceeds of the private placement are expected to be used for working capital, repayment of indebtedness, and general corporate purposes.

What is the total number of ordinary shares Argo Blockchain plc (ARB) will have following the private placement?

Following the private placement, Argo Blockchain plc (ARB) will have a total of 577,001,363 ordinary shares in issue.

Who acted as the Company's agent for the private placement?

Tennyson Securities (a trading name of Shard Capital Partners LLP) acted as the Company's agent for the private placement.