Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Bitcoin miner Core Scientific (CORZ) agreed to borrow $70 million from investment bank B. Riley to replace an existing facility and keep the company running as it goes through the Chapter 11 bankruptcy process.
In a filing, Core Scientific said it is seeking approval from the Bankruptcy Court for the Southern District of Texas Houston Division for the loan to replace a financing plan set out in December. If approved, the loan will enable the company to pay off the existing debtor-in-possession (DIP) facility and give it “up to 15 months runway and significant flexibility,” it said in the filing.
Core Scientific’s downfall followed a sorry 2022 for the bitcoin mining industry, in which firms were squeezed between falling crypto valuations and rising electricity costs. The bitcoin miner filed for bankruptcy protection in December with estimated liabilities of between $1 billion-$10 billion and between 1,000-5,000 creditors. At the time, Core Scientific accounted for around 10% of the computing power on the Bitcoin network.
The loan “contains economic terms that are reasonable and generally superior to those provided under the original DIP facility,” and better than any alternative proposal, Core Scientific said.
“The Replacement DIP Facility lays the foundation on which the debtors will seek to negotiate a consensual Chapter 11 plan with all of their key constituents and maximize value for all stakeholders.”
Core Scientific sought to schedule a hearing for the request for Feb. 1.
Read more about
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.
