Core Scientific’s Bankruptcy Recovery Plan Progresses
Core Scientific, a Bitcoin mining company, has filed a disclosure statement for its third-amended bankruptcy recovery plan. The new filing includes a specific timeline for gaining support from key stakeholders and emerging from bankruptcy before January 15.
Final Stages of Bankruptcy
The debtors are aiming to move forward quickly in gathering votes and confirming the plan while keeping administrative costs low. A hearing on the conditional approval of the plan is scheduled for Tuesday, with voting on the plan occurring until December 13. Final approval of the disclosure statement is anticipated on December 22, with the plan set to go effective between January 2 and January 13, 2024.
Multiple stakeholders are involved in the voting process, including convertible noteholders, secured mining finance lenders, the committee of unsecured creditors, equity holders, and investment bank B. Riley – the largest holder of unsecured claims in the company.
Core Scientific received $100 million in equity financing from B. Riley in June of last year and approved a $70 million loan from B. Riley in March after going bankrupt in December to help get back on its feet. However, both parties currently lack support for the bankruptcy plan as it stands.
What’s The Plan?
The proposed bankruptcy plan values Core Scientific at $1.5 billion and aims to significantly reduce its debt while preserving over 240 jobs at the company. It includes issuing $150 million in new notes and $260 million in new convertible notes. The new notes will carry a 12% interest rate and mature four years after the plan becomes effective.
The convertible notes give Core the option to repay creditors at either 10% in cash or at 6% in cash and another 6% in common stock, maturing in five years. Core Scientific was one of the largest Bitcoin miners worldwide in January 2023, accounting for over 5% of Bitcoin’s hash rate alone.
Hot Take
The filing by Core Scientific represents a significant step forward as it navigates through bankruptcy proceedings. The proposed recovery plan outlines a clear path to financial stability and addresses key concerns related to debts while aiming to preserve jobs within the company.
By
By
By
By
By