Core Scientific, a major Bitcoin mining company that filed for bankruptcy, has successfully closed a $55 million equity offering. This move comes as the company prepares to emerge from its Chapter 11 filing in December 2022. The equity offering was oversubscribed, leading to excess capital being returned to investors.
Adam Sullivan, CEO of Core Scientific, stated that the successful raise and full repayment of previously drawn amounts on their debtor-in-possession (DIP) financing puts the company in a strong position to emerge from Chapter 11 in January. The company is expected to have enhanced liquidity and be well-positioned to continue executing its growth plans.
Core Scientific plans to relist on the Nasdaq stock exchange once the restructuring concludes and it returns to solvency. The company went public in mid-2021 through its acquisition of Power & Digital Infrastructure Acquisition Corp., a deal valued at $4.3 billion at the time.
As per the latest financial report from November 2023, Core Scientific held assets totaling $2.3 billion and liabilities amounting to $559 million. This resulted in shareholder equity worth over $1.7 billion on its balance sheet. The company has also fully repaid its $35 million DIP financing loan and still has access to the $35 million in DIP financing as it finalizes bankruptcy proceedings this month.
The company’s bankruptcy last year was attributed to falling Bitcoin prices, increasing mining costs, and a significant increase in competition from the Bitcoin mining sector. Bad debt exposure to the bankrupt crypto lending firm Celsius, which filed for bankruptcy in June 2022 amid widespread liquidity issues across the crypto industry, was also a factor. Celsius’ former CEO, Alexander Mashinsky, was later charged with fraud.
Core Scientific’s restructuring plan anticipates a clean balance sheet as it emerges from bankruptcy, with $709 million in net debt and $791 million in shareholder equity. Shareholders will receive new shares at a conversion ratio of 25:1, giving them $1.08 per pre-exchange share. Convertible noteholders will obtain recovery rates between 120% and 162% of face value on existing debt notes.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | |
| Sentiment | positive |
| Relevance Score | 1 |
| People | Alexander Mashinsky, Adam Sullivan |
| Companies | Power & Digital Infrastructure Acquisition Corp., Celsius, Core Scientific, Nasdaq |
| Currencies | Bitcoin |
| Securities | None |
