Major Bitcoin miner Core Scientific has provided a comprehensive explanation of its bankruptcy plan, which could be approved by the court and allow the company to emerge from Chapter 11 bankruptcy. The reorganization plan, scheduled to take effect on January 5, 2024, entails significant changes not only in the financial environment but also in the business environment.
Through implementation of this plan, Core Scientific will emerge from bankruptcy proceedings with net debt of $709 million and equity value of $791 million. The debt maturing by 2025 is only $46 million, so the plan is to manage the debt efficiently. The proposal calls for the new shares to be exchanged at a ratio of 25:1, which equates to $1.08 per share before exchange. The transaction is open to the company’s public shareholders. For bonds maturing in April, bondholders will receive $1.628 for each dollar of face value, and for bonds maturing in August, bondholders will receive $1.201 for each dollar of face value. This deployment is expected to occur on January 3, 2024.
Core Scientific operates seven plants with a total capacity of 724 MW, spread across five U.S. states. The company expects revenues to increase from $583 million in 2024 to $968 million in 2027, as it intends to add 372 megawatts of capacity by the end of fiscal 2027. Accepting a rescue offer from the B. Riley Financial Services Platform was one of the contributing factors to the company’s impending bankruptcy. Other factors include low returns and falling Bitcoin value.
Core Scientific plans to relist its shares on Nasdaq during this restructuring, which will allow the company to retain approximately 60% of its shareholders. This is a big turnaround for the company. Adam Sullivan, the company’s CEO, expressed confidence about the future. He cited Bitcoin and the growing demand for high-value computing as key drivers for creating shareholder value and achieving full-scale operational efficiencies.
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