Hut 8 completes transaction to acquire four power generation facilities totaling 310 MW in partnership with Macquarie
- None.
- None.
Insights
The acquisition of four natural gas power plants by Hut 8, in partnership with Macquarie, signifies a strategic move to secure energy resources essential for digital asset mining and high performance computing operations. This transaction enhances Hut 8's control over its energy supply, a critical factor given the energy-intensive nature of cryptocurrency mining. By owning power infrastructure, Hut 8 can potentially reduce operational costs and mitigate risks associated with energy price volatility.
From an energy sector perspective, the move by a digital asset company into direct energy production is a notable diversification strategy. It reflects a broader trend where companies in high-energy-demand industries seek to stabilize their energy inputs. The 310 MW capacity across the acquired facilities positions Hut 8 to leverage economies of scale and improve its competitive edge in the digital mining space.
The partnership structure and financing arrangement with Macquarie Equipment Finance Ltd. indicate a leveraged investment approach, utilizing an operating lease facility. This financing strategy may enable Hut 8 to preserve capital while expanding its asset base. The minority equity interest held by Macquarie serves as an endorsement of the venture's potential profitability and aligns the interests of both parties.
For investors, the resolution of litigation with Validus Power Corp. entities removes legal uncertainties and potential financial liabilities. This clean slate allows Hut 8 to focus on operational efficiencies and strategic growth without the overhang of legal disputes. The transaction's impact on Hut 8's financials, particularly in terms of cash flow and debt levels, will be a key area for evaluation in the coming quarters.
The strategic options being evaluated for the newly acquired assets are likely to focus on optimizing the energy output for digital asset mining while exploring potential commercial opportunities within the energy sector. As the majority owner, Hut 8's decision-making in managing these assets will be crucial in determining the success of this venture.
Given the current market dynamics, where energy costs are a significant concern for digital asset miners, Hut 8's acquisition could set a precedent for other companies in the industry. The ability to generate a return on investment in the near term, as stated by CEO Asher Genoot, will be closely watched by market participants as an indicator of the viability of integrating energy production into digital asset mining operations.
MIAMI, Feb. 15, 2024 (GLOBE NEWSWIRE) -- Hut 8 Corp. (Nasdaq | TSX: HUT), ("Hut 8” or the “Company”) one of North America’s largest, most innovative digital asset mining pioneers and high performance computing infrastructure providers has completed its previously announced stalking horse bid transaction (the "Transaction") to acquire four natural gas power plants in Ontario, Canada, in partnership with Macquarie Equipment Finance Ltd. (“Macquarie”), a subsidiary of Macquarie Group Limited, a global financial services group.
“We have developed a deep partnership with Macquarie throughout this process and are actively working with them on a plan to generate a return on our ownership interest in these assets in the near term,” said Hut 8 CEO Asher Genoot. “We are evaluating a range of strategic options for these assets and look forward to sharing updates as they materialize.”
The joint venture entity formed by Hut 8 and Macquarie, Far North Power Corp. (“Far North”), is now the owner of 310 MW of power infrastructure, including:
- A 110 MW facility in Kingston
- A 120 MW facility in Iroquois Falls
- A 40 MW facility in Kapuskasing
- A 40 MW facility and Bitcoin mine in North Bay
"Our leadership team not only brings a proven track record of maximizing the value of distressed assets to this transaction but also brings a wealth of energy sector expertise and relationships," said Chris Vickery, Vice President of Energy at Hut 8. "We are excited to continue collaborating with the Macquarie team to refine a commercial strategy for these assets and look forward to exploring further opportunities to deepen our relationship with our partner."
With the completion of the Transaction, Macquarie has entered into a new secured funding arrangement with Far North in the form of an operating lease facility. In addition, Macquarie now holds a minority equity interest of approximately
About Hut 8
Through innovation, imagination, and passion, Hut 8 Corp.’s seasoned executive team is bullish on creating value at the intersection of infrastructure and energy through Bitcoin mining and hosting, groundbreaking managed services, energy arbitrage, operating traditional data centers, and capitalizing on emerging technologies like AI and machine learning. Headquartered in Miami, Florida, Hut 8 Corp.’s infrastructure portfolio includes eleven sites: five high performance computing data centers across British Columbia and Ontario that offer cloud, co-location, AI, machine learning, and VFX rendering computing solutions, and six Bitcoin mining, hosting, and managed services sites located in Alberta, New York, Nebraska, and Texas. Long-distinguished for its unique treasury strategy, Hut 8 Corp. has one of the highest inventories of self-mined Bitcoin of any publicly-traded company globally. For more information, visit www.hut8.com and follow us on X (formerly known as Twitter) at @Hut8Corp.
Cautionary Note Regarding Forward–Looking Information
This press release includes "forward-looking information" and "forward-looking statements" within the meaning of Canadian securities laws and United States securities laws, respectively (collectively, "forward-looking information"). All information, other than statements of historical facts, included in this press release that address activities, events or developments that Hut 8 expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion and growth of the business, operations, plans and other such matters is forward-looking information. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "allow", "believe", "estimate", "expect", "predict", "can", "might", "potential", "predict", "is designed to", "likely" or similar expressions. Specifically, such forward-looking information included in this press release includes, but is not limited to, statements relating to the Transaction and our ability to generate a return on the value of our ownership interest in the assets acquired in the Transaction.
Statements containing forward-looking information are not historical facts, but instead represent management's expectations, estimates and projections regarding future events based on certain material factors and assumptions at the time the statement was made. While considered reasonable by Hut 8 as of the date of this press release, such statements are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to, security and cybersecurity threats and hacks, malicious actors or botnet obtaining control of processing power on the Bitcoin network, further development and acceptance of the Bitcoin network, changes to Bitcoin mining difficulty, loss or destruction of private keys, increases in fees for recording transactions in the Blockchain, erroneous transactions, reliance on a limited number of key employees, reliance on third party mining pool service providers, regulatory changes, classification and tax changes, momentum pricing risk, fraud and failure related to digital asset exchanges, difficulty in obtaining banking services and financing, difficulty in obtaining insurance, permits and licenses, internet and power disruptions, geopolitical events, uncertainty in the development of cryptographic and algorithmic protocols, uncertainty about the acceptance or widespread use of digital assets, failure to anticipate technology innovations, the COVID19 pandemic, climate change, currency risk, lending risk and recovery of potential losses, litigation risk, business integration risk, changes in market demand, changes in network and infrastructure, system interruption, changes in leasing arrangements, failure to achieve intended benefits of power purchase agreements, potential for interrupted delivery, or suspension of the delivery, of energy to the Company's mining sites, and other risks related to the digital asset and data center business. For a complete list of the factors that could affect the Company, please see the "Risk Factors" section of the Company's Registration Statement on Form S-4 dated November 7, 2023, available under the Company's EDGAR profile at www.sec.gov, in addition to Hut 8's other continuous disclosure documents which are available under the Company's SEDAR+ profile at www.sedarplus.ca and under the Company's EDGAR profile at www.sec.gov.
Hut 8 Corp. Investor Relations
Sue Ennis
sue@hut8.io
Hut 8 Corp. Media Relations
Erin Dermer
erin.dermer@hut8.io
FAQ
What did Hut 8 Corp. acquire in Ontario, Canada?
Who is Hut 8's partner in the acquisition of the power plants?
What is the name of the joint venture formed by Hut 8 and Macquarie?
How much power infrastructure does Far North Power Corp. now own?
What percentage of equity interest does Macquarie hold in Far North?
