Bitcoin miner Core Scientific (CORZ) borrowed $70 million from investment bank B. Riley to replace an existing facility and maintain operations during the Chapter 11 bankruptcy.
Core Scientific stated in a filing that it was seeking permission from the Bankruptcy Court for the Southern District of Texas Houston Division to proceed with the loan in place of a financing plan first proposed in December. The application states that the firm will have up to 15 months runway and substantial flexibility with the loan’s approval, allowing it to eliminate the debtor-in-possession facility.
#Bitcoin miner Core Scientific (#CORZ) has agreed to borrow $70 million from investment bank B. Riley to replace existing hardware and keep the company running while it goes through Chapter 11 bankruptcy. pic.twitter.com/JPRnUIXRAo
— MoonDefi (@moondefi1) January 31, 2023
Core Scientific’s demise came after a rough year for the bitcoin mining sector in 2022, when businesses were hit hard by the bear market and increased power bills. In December, the miner filed for bankruptcy protection from the U.S. court system, with liabilities of up to $10 billion and 5,000 creditors. At that point, about 10% of the Bitcoin network computer power was controlled by Core Scientific
Core Scientific affirmed that this loan has economic conditions reasonable and typically preferable to those granted under the initial DIP facility and is superior to any competing proposal.
To maximise value for all stakeholders, the debtors will use the framework provided by the Replacement DIP Facility as they negotiate a Chapter 11 plan with their various stakeholders.
Core Scientific was trying to schedule a hearing for the request for Feb. 1.