After undergoing restructuring due to bankruptcy in 2022, Core Scientific makes a comeback on Nasdaq.
Texas-based Bitcoin mining company Core Scientific has made a comeback on the Nasdaq today after undergoing a restructuring process following its bankruptcy declaration in 2022.
In a statement released on January 23rd, the crypto miner announced that its restructuring plan had resulted in a $400 million reduction in debt through the conversion of debts from equipment lenders and convertible note holders into equity.
Additionally, Core Scientific outlined further strategies to decrease its debt, including converting remaining convertible debt, exercising warrants by investors, and using available cash to repay debts. As per the reorganization plan, shareholders are expected to receive approximately 60% of the new share capital of Core Scientific, with the company committing to fully repay its debt.
Adam Sullivan, the CEO of Core Scientific, expressed optimism about the company’s future, emphasizing the firm’s readiness to implement a practical growth strategy, prepare for the upcoming bitcoin halving, and harness the potential of transforming energy into high-value compute for bitcoin mining and other applications.
The company, which operates mining facilities across five states in the US with a total power capacity of 724 megawatts, plans to expand its mining capacity by over 50% in the next four years, including the deployment of new Bitcoin miners.
Core Scientific faced challenges on its path to recovery. In November 2022, the company cautioned about potential cash shortages due to a combination of factors such as a decline in Bitcoin prices, escalating electricity costs, increased hash rate, legal expenses, and the bankruptcy of Celsius Network, a major client.
Despite these setbacks, Core Scientific filed for Chapter 11 bankruptcy protection in December 2022 with the aim of avoiding liquidation and continuing operations while negotiating with its major creditors.
In a related development, B. Riley Financial Inc., a Los Angeles-based investment bank and one of Core Scientific’s major creditors, is reportedly being investigated by the US Securities and Exchange Commission for transactions associated with securities fraud.
In December 2022, B. Riley proposed a $72 million non-cash pay financing to Core Scientific, intended to provide the company with a two-year runway to achieve profitability.
The broader Bitcoin mining industry has experienced volatility this month. Stocks of major miners like Marathon Digital and Riot Platforms have seen significant declines.
This recent downturn followed the approval of multiple spot bitcoin exchange-traded funds by the US on January 10th, with Marathon Digital’s stock dropping 29.74% since the beginning of the month and Riot Platforms falling by 32.6% in the same period.
