• Core Scientific, a Bitcoin miner, has agreed to borrow $70 million from B. Riley to replace an existing financing facility.
• The loan, if approved by the Bankruptcy Court, will provide Core Scientific with up to 15 months of runway and flexibility.
• Core Scientific filed for bankruptcy in December with estimated liabilities between $1 billion and $10 billion.
Core Scientific, a Bitcoin mining company, has recently struck a deal with investment bank B. Riley for a $70 million loan. The loan, if approved by the Bankruptcy Court for the Southern District of Texas Houston Division, will enable Core Scientific to replace an existing financing facility and provide up to 15 months of runway and flexibility.
Core Scientific is no stranger to bankruptcy proceedings, having filed for Chapter 11 bankruptcy protection in December of 2022. At the time, the company estimated liabilities between $1 billion and $10 billion, and between 1,000-5,000 creditors. Core Scientific accounted for around 10% of the computing power on the Bitcoin network.
The downturn of the Bitcoin mining industry in 2022 led to the company’s downfall, as it was squeezed between falling crypto valuations and rising electricity costs. The loan from B. Riley is intended to help Core Scientific get back on its feet and provide it with a financial cushion to manage the bankruptcy process.
The loan has been structured to pay off the existing debtor-in-possession (DIP) facility and provide Core Scientific with up to 15 months of runway and flexibility. The loan would also give Core Scientific the ability to access additional capital if needed.
The filing for the loan has been submitted to the Bankruptcy Court for the Southern District of Texas Houston Division and is currently awaiting approval. If approved, the loan from B. Riley will provide Core Scientific with the necessary financial resources to continue operations while they go through the bankruptcy process.
The Bitcoin mining industry has been volatile in recent years, and Core Scientific is just one of many companies that have been affected by the changing market conditions. However, with the help of the loan from B. Riley, Core Scientific may be able to get back on its feet and continue operations. Only time will tell if the loan will be approved and if Core Scientific is able to successfully navigate the bankruptcy process.