A bitcoin company involved in a legal dispute with an insolvent North Bay power plant operator is poised to acquire that power-generating facility and three others in Ontario.
Hut 8 Mining said in a news release it’s been informed by KSV Restructuring, the court-appointed monitor in a CCAA process involving Validus Power, that its “stalking horse bid” has been successful in an assets sale process overseen by KSV.
Validus entered Companies’ Creditor Arrangement Act protection on Aug. 29.
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Hut 8 said the final approval from the Ontario Superior Court of Justice is expected to occur some time in January.
Hut 8 had been involved in a separate legal dispute with Validus over a failed power purchase agreement to provide energy to a North Bay bitcoin mining operation that has since been shut down.
According to a release by Hut 8, “we are the only qualified bid” in the sale of four Validus natural gas power plants. The bid price was not disclosed in the release.
When the bid receives final approval from the court, a new Ontario subsidiary of Hut 8 will become the owner of the assets of certain Validus entities. Macquarie will take a 20 per cent ownership stake in this new spinoff company.
Hut 8 will acquire four natural gas power plants in Ontario, featuring a 40-megawatt plant and an idled bitcoin operation in North Bay, a 120-megawatt plant in Iroquois Falls, a 40-megawatt facility in Kapuskaing, and a 110-megawatt facility in Kingston.
A stalking horse bid is a binding offer to purchase the assets of an insolvent company, conditional on the company not receiving a better offer during the CCAA sales process.
The bid was submitted in partnership with Macquarie Equipment Finance, a global financial services company that is an out-of-pocket lender to Validus.
Macquarie, also a secured creditor, accused management of Validus of defaulting on a $55.6-million loan arrangement signed in 2022 to allow Validus to buy the Iroquois Falls power plant. There were also allegations by Macquarie of misappropriation of funds by Validus management.
Hut 8 said the completion of this bid is expected to resolve all litigation claims and counterclaims pending with Validus.
Hut 8 said it will release more information next week as “we look forward to final approvals and completing the process to further scale as a vertically integrated and diversified mining operation.”
