Hut 8 Mining announced that it is prepared to acquire assets from Validus Power Corp. as the latter faces insolvency, according to an Aug. 11 statement.

Hut 8 Mining, a North American digital asset mining company, has entered a transaction “support agreement” with Macquarie Equipment Finance Ltd over energy supplier Validus.

Previously, Validus supplied energy to Hut 8’s mining facility in North Bay, Ontario. However, the company’s assets have now come under the control of a court-appointed receiver, KSV Restructuring Inc., following an order from the Ontario Superior Court of Justice.

In January 2023, Hut 8 filed a lawsuit against its energy supplier, Validus Power Corp, marking a critical juncture in a dispute brewing since late 2022. The case stemmed from Validus’s alleged failure to meet its contractual obligations, as stipulated in the power purchase agreement (PPA) it held with Hut 8. According to the statement, Validus committed to delivering 100MW of power to Hut 8’s mining facility in Northern Ontario.

However, Hut 8 claimed that Validus fell short of this commitment, prompting the mining company to issue a default notice in November 2022. In retaliation, Validus suspended its energy supply to Hut 8’s operations, citing incomplete payment as the reason for this action.

Despite the ongoing contention, Hut 8 denied the allegations made by Validus and pushed forward with the lawsuit, reflecting its commitment to uphold environmental, social, and governance (ESG) principles.

Validus was the energy supplier of Hut 8’s North Bay mining facility, which hosts over 8,800 ASIC mining rigs with a hash rate of 0.84 EH/s, according to Hut 8 data.

As part of the arrangement initiated by Macquarie, a secured creditor of the Validus Entities, there is a possibility of submitting a “stalking horse bid.” If it proves successful, this bid could lead to the resolution of ongoing litigation between Hut 8 and certain Validus Entities.

The potential acquisition of assets from Validus by Hut 8 would see changes for the latter. Since Validus was previously an energy supplier to Hut 8’s mining facility, the assets could involve energy infrastructure, power supply agreements, or physical assets related to power generation and distribution.

These types of assets could help Hut 8 enhance its energy capacity for its mining operations, potentially leading to increased efficiency and scale.

However, it’s worth noting that this prospective acquisition is contingent on several specific conditions. These include the receiver’s acceptance of a stalking horse bid and court approval.

Bitcoin mining companies like Hut 8 Mining Corp. are exploring various strategies, including acquiring assets from financially struggling entities like Validus as a diversification strategy.

Riot, another key US miner, reported over $70 million in profit in its last report, with a critical percentage coming from energy sales. The miner has generated alternative revenue means to offset Bitcoin price swings.

The post Hut 8 Mining eyes asset acquisition as energy supplier faces insolvency appeared first on CryptoSlate.

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