Bankruptcy Court Approves Core Scientific’s Reorganization Plan

The bankruptcy court has approved the reorganization plan of the mining company Core Scientific, with a relisting of shares on the Nasdaq by the end of January.

In December, the firm indicated mid-to-late January 2024 as the timeline for implementing the initiative. As a result, the company’s shareholders will receive approximately 60% of the new equity capital of Core Scientific, and it will fully repay its debt.

This followed a preliminary agreement with stakeholders on the distribution of convertible bonds and shares.

Following the reorganization, the miner aims to maintain its leading position by operating 202,000 cryptocurrency mining units, with plans to increase this to 336,000 by 2027. The company expects annual revenue to reach $583 million in 2024 and grow to ~$968 million by 2027.

In January, the company confirmed an oversubscribed demand for an additional $55 million equity rights offering.

In October 2022, Core Scientific warned of a potential depletion of cash reserves and equivalents by the end of the year. The miner cited a decline in bitcoin prices, increased electricity tariffs, and a rise in hash rate. Liquidity pressure was also exacerbated by legal costs and the bankruptcy of one of its largest hosting clients, Celsius Network.

By the end of the third quarter of the same year, Core Scientific reported a loss of $434.8 million. In a November report, the firm again expressed doubts about its ability to continue operations without additional liquidity.

In December, Core Scientific filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. Later, a group of creditors agreed to lend it $37.5 million.

In February 2023, the company reached an agreement with investment bank B. Riley to secure a $70 million loan on more favorable terms.

In September, Bitmain agreed to invest $53.9 million in Core Scientific as part of a contract to supply 27,000 bitcoin mining devices.