Cango to purchase crypto mining machines for $400M

Cango (CANG) announced that it has entered into agreements to purchase on-rack crypto mining machines with an aggregate hashrate of 50 Exahash per second for total considerations valued at approximately $400M from a group of sellers. The largest seller will be Bitmain Technologies Georgia Limited and Bitmain Development, a leading manufacturer of digital currency mining servers, and the Company has agreed to purchase from Bitmain on-rack crypto mining machines with an aggregate hashrate of 32EH for a total purchase price of $256M in cash. The Company has also agreed to purchase the remaining on-rack crypto mining machines with an aggregate hashrate of 18EH from Golden TechGen, a company incorporated under the laws of the British Virgin Islands and wholly owned by Max HUA, former CFO of Bitmain and the sole shareholder of GT, and certain other sellers, and will pay the purchase price through issuance of an aggregate of approximately 145,658,192 Class A ordinary shares of the Company, valued at $144M, to the sellers in proportion to the aggregate hashrate of the machines to be sold by each seller. Upon closing of the Share-Settled Transactions, GT, which is expected to be the largest seller in these transactions, will own no more than 20% of the Company’s total outstanding shares, and all the sellers in the Share-Settled Transactions will in the aggregate own approximately 37.8% of the Company’s total outstandings shares before any exercise of the warrants described below. The Company also agreed to grant Hua the right to nominate and appoint two directors of the Company until Hua and his affiliates cease to hold more than 5% of the Company’s total outstanding shares.