Core Scientific, a major Bitcoin mining company that filed for bankruptcy, has successfully closed a $55 million equity offering. The offering was oversubscribed, leading to the return of excess capital to investors. Following the full repayment of previously drawn amounts on its debtor-in-possession (DIP) financing, the company is set to emerge from Chapter 11 in January with enhanced liquidity and a strong position to continue executing its growth plans, according to CEO Adam Sullivan.
Core Scientific plans to relist on the Nasdaq stock exchange once it completes its restructuring and 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, rising mining costs, increased competition from the Bitcoin mining sector, and bad debt exposure to the bankrupt crypto lending firm Celsius. Celsius filed for bankruptcy in June 2022 due to widespread liquidity issues across the crypto industry. Its 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, equating to $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 | Global |
| Countries | |
| Sentiment | positive |
| Relevance Score | 1 |
| People | Alexander Mashinsky, Adam Sullivan |
| Companies | Power & Digital Infrastructure Acquisition Corp., Celsius, Core Scientific, Nasdaq stock exchange |
| Currencies | Bitcoin |
| Securities | None |
