The mining company Core Scientific intends to exit the bankruptcy proceeding in mid-to-late January 2024.
Core Scientific has reached an agreement in principle on terms of Chapter 11 Global Plan Settlement with all key stakeholders. In addition, the deadline for participating in the Equity Rights Offering has been extended to Thursday, December 28, 2023.
See full press release here:… pic.twitter.com/PFo7Pme2VN
— Core Scientific (@Core_Scientific) December 21, 2023
According to the press release, the company reached an in-principle agreement with stakeholders on the distribution of convertible bonds and shares. A relisting on Nasdaq is expected subsequently.
Under the plan, the exchange of shares will occur at a 25:1 ratio, equating to $1.08 per share. Bondholders will receive $1.628 per $1 of nominal value for convertible notes due in April 2024, and $1.201 for notes due in August.
In October 2022 the company warned of the possible exhaustion of cash reserves and their equivalents by year-end. The miner cited a drop in Bitcoin price, rising electricity tariffs, and an increase in hash rate. Liquidity pressure was also driven by legal costs and the bankruptcy of one of the hosting client’s largest customers — Celsius Network.
In Q3 of that year Core Scientific reported a loss of $434.8 million. In the November report the firm again expressed doubt about its ability to continue operations without additional liquidity.
In December Core Scientific filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. Later, the group of creditors agreed to lend it $37.5 million.
In February 2023 the company agreed with investment bank B. Riley to receive a $70 million loan on more favorable terms.
In September Bitmain agreed to invest $53.9 million in Core Scientific under a contract to supply 27,000 Bitcoin mining devices.