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By Gerelyn Terzo, Benzinga
The Bitcoin price has stayed true to its inherently volatile nature of late, straying from its all-time high of $74,000 reached in March. In response, blockchain companies are getting more creative about accessing capital. Bitdeer Technologies Group (NASDAQ: BTDR), a Bitcoin miner and semiconductor design company, has responded by turning to capital markets to support its expanding development pipeline, most recently unveiling the pricing details of a $150 million, five-year convertible bond offering as a means to generate cash flow for its activities.
The notes sale was projected to be completed by Aug. 20. Bitdeer also extended the underwriters of the deal a 30-day option to scoop up additional notes in the aggregate principal amount of $22.5 million to offset the potential of over-allotments if demand was greater than anticipated. Bitdeer shares gained following the announcement.
The notes, which represent senior, unsecured obligations of Bitdeer, will accrue interest at a rate of 8.50% per year, paid twice per year to holders. With a maturity date of August 2029, the notes will continue to grow unless converted, redeemed or repurchased by the holders, who have the option to convert until close to the maturity date.
Based on the conversion rate, the bond is convertible at a 35% premium to Bitdeer stock’s price as of August 15. This means after six months, if the stock price is hovering above that level, investors can convert the bond into equity. The offering was designed for institutional investors who are interested in this asset class, but retail investors might have received an opportunity to participate through mutual funds or exchange-traded funds (ETFs), as well.
Bitdeer anticipates net proceeds from the offering of $144.5 million (after discounts, commissions and expenses), translating to a greater $166.3 million upon the exercising of the underwriters’ over-allotment clause. As a leader in all things Bitcoin mining, Bitdeer plans to direct the proceeds of the offering toward its ongoing data center expansion and mining rig development based on its SEALMINER ASIC technology as well as working capital and general corporate purposes.
Bitdeer has an ambitious growth strategy, and the company reports it is on pace to become the industry’s first fully integrated Bitcoin miner. At the end of the second quarter, the company had approximately $204 million in cash and $25 million in cryptocurrency on its balance sheet, which in addition to the recent capital markets offerings, should provide it with the working capital it needs to complete its pipeline, including next-generation ASIC chip production as well as its data center expansions. Bitdeer’s recent developments include:
Mass production of its SEALMINER A1 chips for Bitcoin mining, with plans to add 3.4 EH/s to its data centers by year-end.
Delivery of Bitdeer’s second-generation SEAL02 chip wafers is expected in September, after which time the company plans to ramp up mass production by year-end.
Third-generation SEAL03 chip R&D is underway.
The company’s ongoing data center projects in the U.S., Norway and Bhutan remain on track as its Bitcoin mining electrical capacity continues to grow.
Bitdeer’s 2024 Capital Raising Toolbox
Earlier this year, Bitdeer completed a financing deal with stablecoin leader Tether International Limited, comprising a $100 million common stock transaction with the potential for an additional $50 million upon the exercising of warrants. Bitdeer was reportedly pleased to bring a global industry player like Tether to its capital table.
BTIG served as the sole bookrunner on the offering. With a market cap close to $1 billion, Bitdeer stock has earned a consensus price target of $14 per share across eight Wall Street analysts. Investors who are bullish on Bitcoin, the blockchain and AI can gain exposure to each of these high-tech segments and more through Bitdeer. Learn more about what the company has to offer here.
Featured photo by Elf-Moondance on Pixabay.
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