Core Scientific, a Bitcoin miner that took a massive hit with previously falling crypto prices, received approval for Chapter 11 restructuring from a US bankruptcy judge. Following this decision, the company is expected to re-list its shares on Nasdaq by the end of January.
Restructuring of Core Scientific
The decision yesterday (Tuesday) allowed the Bitcoin miner company to cut its debt by $400 million and preserve 240 jobs. The judge highlighted that the process “provides a tremendous recovery for both unsecured creditors and also equity holders.”
Under the restructuring terms, the company’s existing shareholders will receive 60 percent of the new equity in common stock and warrants. The approval of the restructuring followed the closure of a proposed $55 million equity rights offering earlier this month.
The Bankruptcy Court has confirmed our Chapter 11 plan of reorganization. The Bankruptcy Court's approval of our plan clears the way for Core Scientific to emerge and re-list on Nasdaq by the end of January 2024!Read the full press release here: https://t.co/9pvy6hKOrP pic.twitter.com/3rnKjG1TBv
— Core Scientific (@Core_Scientific) January 16, 2024
A Victim of Last Year’s Crypto Collapse
Core Scientific filed for Chapter 11 bankruptcy protection last year when the crypto miners were struggling with the falling prices of Bitcoin. It was additionally one of the few publicly listed Bitcoin miners.
The bankruptcy of Core Scientific was further pushed by the fall of Celsius, its biggest customer that also filed for bankruptcy. It failed to pay a $7 million energy bill for its mining activities.
“Today’s plan confirmation is a defining moment in our reorganization; we’re poised to emerge by the end of this month as an even stronger company, with a highly motivated team that is aligned for success,” said Adam Sullivan, the CEO at Core Scientific.
“With demand for Bitcoin and high-value compute continuing to rise, we look forward to creating value for our shareholders as we execute our growth plan, de-lever our balance sheet, and deliver superior efficiency at scale.”
Core Scientific's December and Full Year 2023 #Bitcoin Production and Operations Update is out!- Produced 1,177 self-mined bitcoin and an estimated 449 bitcoin from colocated miners in December- Produced a total of 13,762 self-mined bitcoin and an estimated 5,512 bitcoin… pic.twitter.com/Sr0Acvgb7J
— Core Scientific (@Core_Scientific) January 5, 2024
The bankruptcy court’s decision came when the crypto market witnessed bullish sentiments. The US securities market regulator recently approved 11 Bitcoin exchange-traded funds, resulting in the listing of them on stock exchanges. Although Bitcoin still remains highly volatile, it is now trading at around $42,700 as of press time, compared to about $16,000 a year ago.
This article was written by Arnab Shome at www.financemagnates.com.
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