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Core Scientific Set To Exit Bankruptcy After $77 Million Deal With Bitmain

Core Scientific, the largest publicly listed crypto mining firm by hashrate, is set to exit its Chapter 11 bankruptcy proceedings following a $77 million deal with the world’s largest crypto mining equipment maker Bitmain. The deal was disclosed in a with the U.S. Bankruptcy Court for the Southern District of Texas earlier today.

Core Scientific (CORZ) Stock Gains 4%

As per the latest court filing, Core Scientific has entered into an agreement to acquire 27,000 of Bitmain’s Antminer S19j XP mining rigs for $77.1 million. In exchange for the miners, Bitmain will receive $23 million cash and equity worth $54 million in the Texas-based crypto mining giant. 

Crypto platform Anchorage Digital, which is owed $29 million by Core Scientific, will have its claim completely converted into equity in the restructured company. The other option for creditors of the bankrupt crypto miner is to take on secured debt at 80% of the value of their claims. 

Creditors, including BlockFi, Barings, MassMutual Asset Finance, BaringsTrinity Capital, and 36th Street Capital Partners, are reportedly going to take on secured debt in the emerging company. When Core filed for bankruptcy in December last year, these creditors held a debt exposure of approximately $193 million. 

B.Riley, which extended a loan of $70 million to Core Scientific as part of a bankruptcy financing deal earlier this year, is expected to provide $25 million in new financing. The investment bank will also convert the outstanding amount of the loan to a delayed term loan. The bankrupt crypto miner is also negotiating a $55 million equity rights offering for common stockholders. 

The reorganization plan is largely contingent on approval from Core Scientific’s creditors as well as the relevant bankruptcy court. The latest developments led to a 4% hike in the company’s share price. At the time of writing, Core’s stock was trading at $0.95. 

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 8/8/2023

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