IREN - Iris Energy warns some bitcoin miners don't cover debt financing obligations

Eco-friendly bitcoin ( BTC-USD ) miner Iris Energy ( NASDAQ: IREN ) warned investors Wednesday that some of its cryptocurrency mining equipment, owned by special-purpose vehicles (SPVs), generate insufficient cash flow to meet their debt financing obligations.

The stock tanked 11.5% to $3.0 in early trading, compared with $24.45 a year ago.

Moreover, the equipment's market value trails "well below the principal amount of the relevant loans," the company said, adding that restructuring talks with the lender remain ongoing.

Iris ( IREN ) has three non-recourse SPVs for the purpose of financing certain miners. As of September 30, they have $104M in combined debt outstanding secured against 3.8 exahashes per second of miners.

The company along with its subsidiaries have $53M in cash as of October 31.

"We remain committed to exploring a way in which we may be able to allow the lender to recover its capital investment, however, we are also mindful of the current market and that these arrangements were deliberately structured to minimize any potential impact on the broader Group during a protracted market downturn," said Iris Energy Co-Founder and Co-CEO Daniel Roberts.

With bitcoin ( BTC-USD ) down some 70% from its November 2021 peak coupled with higher energy prices, BTC miners' profitability have been squeezed. In the past week or so, both Core Scientific ( CORZ ) and Argo Blockchain ( ARBK ) ( OTCQX:ARBKF ) took the spotlight amid mounting liquidity woes .

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