Bitcoin Miner Core Scientific to Borrow $70M From B. Riley
Bitcoin miner Core Scientific (CORZ) agreed to borrow $70 million from investment bank B. Riley to replace an existing facility and keep the company running as it goes through the Chapter 11 bankruptcy process.
In a filing, Core Scientific said it is seeking approval from the Bankruptcy Court for the Southern District of Texas Houston Division for the loan to replace a financing plan set out in December. If approved, the loan will enable the company to pay off the existing debtor-in-possession (DIP) facility and give it "up to 15 months runway and significant flexibility," it said in the filing.
Core Scientific's downfall followed a sorry 2022 for the bitcoin mining industry, in which firms were squeezed between falling crypto valuations and rising electricity costs. The bitcoin miner filed for bankruptcy protection in December with estimated liabilities of between $1 billion-$10 billion and between 1,000-5,000 creditors. At the time, Core Scientific accounted for around 10% of the computing power on the Bitcoin network.
The loan "contains economic terms that are reasonable and generally superior to those provided under the original DIP facility," and better than any alternative proposal, Core Scientific said.
"The Replacement DIP Facility lays the foundation on which the debtors will seek to negotiate a consensual Chapter 11 plan with all of their key constituents and maximize value for all stakeholders."
Core Scientific sought to schedule a hearing for the request for Feb. 1.