Hut 8 Corp., one of North America’s largest Bitcoin miners, has announced that Anchorage Digital has converted the remaining $38 million of its outstanding loan into common shares.
The conversion was completed at $16.395 per share, representing a 51% premium over the 20-day volume-weighted average price through Sept. 26.
The move significantly enhances Hut 8’s financial flexibility as it pursues new growth opportunities in AI and mining infrastructure.
The conversion extinguishes all obligations related to the loan, providing Hut 8 with increased flexibility as it continues expanding into high-performance computing and AI hosting. The company will file further details in a forthcoming Form 8-K with the SEC.
The loan, which originated in February 2023, was secured by 21,000 Bitcoin mining machines as collateral. Initially, the loan had a 14% interest rate, which was reduced to 9% by June.
It was initially set to mature in five years, but the conversion to equity has allowed Hut 8 to eliminate the remaining balance early, further reducing its debt.
Diversification
Following the debt conversion, Hut 8 still carries approximately $290 million in debt, including $150 million raised in June 2024 to fund its expansion into AI data centers.
Despite this, the company’s reduction in leverage, along with its focus on AI hosting and mining infrastructure, places it in a stronger position to negotiate with potential partners and advance key projects.
Hut 8 has expanded its operations beyond crypto mining, recently launching a GPU-as-a-service program powered by Nvidia H100 GPUs in collaboration with AI developers.
The company’s long-term strategy aims to diversify revenue streams by incorporating AI infrastructure into its business model, further enhancing its resilience in the evolving digital asset space