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Insolvency court approves transfer of former Validus power plants, bitcoin facility to new operator

Hut 8 awarded ownership of natural gas plants in Iroquois Falls, Kapuskasing and North Bay
The former Validus power plant in North Bay (Company photo)

An Ontario court has given approval for cryptocurrency producer Hut 8 to acquire four natural gas power plants once owned by insolvent Validus Power, plus a mothballed North Bay bitcoin mining operation.

Hut 8 announced Jan. 8 that it has received an approval and vesting order from the Ontario Superior Court of Justice that largely wraps up the CCAA (Companies’ Creditors Arrangement Act) proceedings that began last August.

Hut 8 and Macquarie Equipment Finance had teamed up to launch a stalking horse bid for the four plants that was deemed by the court to be the successful bidder in a sales process that started in September.

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. 

Hut 8 had been embroiled in a separate legal action with Validus over a broken power purchase agreement that is now resolved with this judgment.

Macquarie Equipment Finance, a global financial services group, pursued Validus Power last summer for defaulting on a $55.6-million loan arrangement signed in 2022 to buy the Iroquois Falls plant and also of misappropriating funds.

Hut 8 is forming a new spinoff company, Far North Power Corp., to run the plants, which includes a 110-megawatt facility in Kingston, a 120-megawatt producer in Iroquois Falls, a 40-megawatt plant in Kapuskasing, and a 40-megawatt facility and a bitcoin operation in North Bay. Macquarie will take a 20 per cent ownership stake in this new spinoff company.

Only the Iroquois Falls and Kingston plants are operational, supplying power to the Ontario grid on an as-needed basis through the Independent Electricity System Operator.