Its acquired Norwegian subsidiary unit Kolos has been “sold” to the local municipality Narvik under a “share purchase agreement”, after the firm said it was affected by new crypto mining tax laws and “uncertainty” around the development.
Under the agreement the company transferred all of the shares of Kolos to the municipality along with a US$200,000 payment - it paid to get rid of it.
“This allows the company to focus on its data centres located in Sweden and Iceland which mine Ethereum continuously on the cloud,” said HIVE.
HIVE bought stuttering Kolos for almost $10 million in 2018, after Kolos originally announced its intention to build a 6.5 million sq ft colocation facility in 2017 - offering up to 1,000MW of power capacity.
Instead, HIVE promised a much scaled down project focused on crypto mining with an initial power capacity of 30MW.
In December 2018, the Norwegian parliament approved a legislative bill saying cryptocurrency miners would no longer be subject to the relief on power consumption at the same rate as other power-intensive industries - this change was included in the state budget for 2019.
HIVE said: “As a result of this legislative change and the uncertainty around the development of this greenfield project, management concluded that it was no longer probable that the company would be able to meet the development conditions
“As a result, the land development rights were impaired and were written down to US$0 from US$15 million as at 31 March 2019.”
Frank Holmes, HIVE executive chairman, said: “We are unfortunate that it has come to this, but glad that the property has been retained by the local community so that it can focus on developing this greenfield property for many uses.
“This deal [the acquisition] was made before myself or our CFO had assumed executive duties. Our management team can now continue to focus on more immediate needs like upgrading our current facilities and expanding operations in Sweden, Iceland and Canada.”
The company says it currently holds crypto assets worth around US$109 million across Ethereum and Bitcoin, along with cash of US$33 million.
