How Did Hut 8 Secure Court Approval for Its Stalking Horse Bid?
Hut 8 Mining Corp.
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How Did Hut 8 Secure Court Approval for Its Stalking Horse Bid?

Hut 8 Expands with Acquisition of Natural Gas Power Plants and North Bay Bitcoin Mine

Hut 8 Corp. (Nasdaq | TSX: HUT), a leading figure in North America's digital asset mining and high-performance computing, has taken a significant step forward in its growth trajectory. The company recently received court approval for its acquisition of four natural gas power plants, including a Bitcoin mine in North Bay, Ontario.

Court Approval of the Stalking Horse Bid

The Ontario Superior Court of Justice (Commercial List) granted an approval and vesting order in the context of the ongoing proceedings under the Companies’ Creditors Arrangement Act of Validus Power Corp. (VPC) and its subsidiaries. This marks a pivotal moment for Hut 8, enabling the company to proceed with its previously announced stalking horse bid transaction.

Partnership with Macquarie Equipment Finance Ltd.

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The transaction, formulated in partnership with Macquarie Equipment Finance Ltd. , a subsidiary of the global financial services group Macquarie Group Limited, exemplifies Hut 8's strategic approach to expansion and collaboration.

Acquisition Details

The acquisition includes four natural gas power plants located in Ontario, with varying capacities:

A 40 MW facility in Kapuskasing
A 110 MW facility in Kingston
A 120 MW facility in Iroquois Falls
A 40 MW facility and Bitcoin mine in North Bay

BidCo: The New Ontario Subsidiary

A newly formed Ontario subsidiary of Hut 8, known as BidCo, will acquire these assets. The transaction stipulates that BidCo will acquire these facilities free of any encumbrances, except for certain permitted ones.

Secured Funding Arrangement with Macquarie

The completion of the transaction includes a new secured funding arrangement between Macquarie and BidCo. This will take the form of an operating lease facility, with Macquarie acquiring a minority equity interest of approximately 20% in BidCo. Meanwhile, a subsidiary of Hut 8 will retain the majority ownership of approximately 80%.

Anticipated Closing and Litigation Resolution

The transaction is expected to close by February 15, 2024, subject to standard closing conditions. It also aims to resolve all litigation claims and counterclaims currently pending between Hut 8 and certain Validus Entities.

Hut 8 Corp. stands out for its innovative approach at the intersection of infrastructure and energy. The company's focus spans Bitcoin mining and hosting, managed services, energy arbitrage, and operating traditional data centers. They are also capitalizing on emerging technologies such as AI and machine learning.

Global Presence and Strategic Treasury Strategy

Headquartered in Miami, Florida, Hut 8's infrastructure portfolio includes eleven sites across North America. These encompass five high-performance computing data centers and six Bitcoin mining and hosting sites. The company boasts one of the highest inventories of self-mined Bitcoin among publicly-traded companies globally.

Conclusion: A Strategic Leap for Hut 8

This acquisition represents a major milestone for Hut 8, not only in terms of expansion but also in aligning with future energy and digital asset mining endeavors. The company's strategic vision, coupled with its innovative approach, positions it as a leader in the dynamic and evolving landscape of digital asset mining and high-performance computing.

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