Hut 8 Mining, a digital asset mining company and computing infrastructure provider, announced that the Ontario Superior Court of Justice has approved the company’s stalking horse bid for the acquisition of four natural gas-fired plants and a bitcoin mine in North Bay.

The gas-fired plants would power Hut 8’s crypto mining operations. The assets were under Validus Power Corp. but the company has faced financial challenges. KSV Restructuring is helping carry out the sale of the assets and operations of certain Validus’ subsidiaries, also approved by the court.

A stalking horse bid is the first bid to buy the assets of a bankrupt company, chosen by the selling company to set a bidding floor and prevent low bids. The stalking-horse bidder is often offered incentives, including breakup fees and expense reimbursements. Additional companies are able to bid on the assets after the stalking horse bid is offered.

If the stalking horse bid is ultimately declared the successful one, a new Ontario subsidiary of Hut 8 will become the owner of the assets. The bid is supported by Macquarie Equipment Finance, a subsidiary of Macquarie Group. Macquarie would receive a minority equity interest in the Hut 8 subsidiary of approximately 20 percent and the Hut 8 subsidiary will be the majority owner with the remaining approximately 80 percent.

The four natural gas power plants in question are located in Ontario:

Completion of the stalking horse bid would also include a new secured funding arrangement with Macquarie and the Hut 8 subsidiary in the form of an operating lease facility. The completion of the stalking horse bid is also expected to result in the full and final resolution of all litigation claims and counterclaims currently pending between Hut 8 and certain Validus subsidiaries.

Completion of the stalking horse bid is expected to occur in 2023 Q4.

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