HIVE Blockchain Announces $15 Million Debentures with US Global Funds

Jafrin  |  Dec 25, 2020

HIVE Blockchain Technologies have announced conducting a private placement of convertible debentures with U.S. Global Investors Ltd. fund for $15 million. The debentures will mature 60 months from the date of issuance. The interest rate stands at 8% p.a. payable monthly while the principal is payable quarterly. HIVE Blockchain was the last trading at $2.47 on TSX Venture.

HIVE Blockchain Announces $15M Convertible Debenture

The debentures will be issued at face value, with each debenture being redeemable by HIVE at any time. Additionally, U.S. Global Investors will also be issued 5 million common share purchase warrants. Each whole warrant will enable U.S. Global Investors to acquire one common share at an exercise price of CAD 3.00 per share for a three years period from closing.

In an announcement release, Frank Holmes, Interim Executive Chairman of HIVE, stated:

“The Transaction is an excellent opportunity for HIVE to enhance liquidity, maintain momentum, and deploy capital into additional miners and infrastructure.  U.S. Global has recently sold shares of HIVE in order to redeploy capital back into HIVE. The purchase of an 8% debt instrument by U.S. Global is consistent with its investment criteria and assists the HIVE by providing working capital for its growth strategy. The financing is being completed without the usual 6% broker fees, and the cost of capital is much less than the 16% cost of capital associated with leasing equipment for crypto mining.”

Net Proceeds to Be Used in Working Capital

The debentures were raised following the U.S. Global Investors selling $20.8 million worth of securities in the firm. U.S. Global Investors (Canada) Ltd. fund sold out its entire 8.5 million share position over a period from Dec 18 through to Dec 22.

This comes as a significant gain considering the shares were originally purchased at a price of just $0.30 per unit under HIVE’s initial public transaction on September 7, 2017. The net proceeds from the transactions will be used for general corporate purposes and working capital.

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