Core Scientific Announces Bankruptcy Plan Approval and Restructuring Details

Core Scientific, a major Bitcoin miner, has recently provided a detailed description of its bankruptcy plan, which has been approved by the court. This plan will allow the company to emerge from Chapter 11 bankruptcy and implement significant changes in both its financial and operational environment.

The proposed reorganization is scheduled to go into effect on January 5, 2024. As part of this plan, Core Scientific aims to emerge from the bankruptcy process with a net debt of $709 million and an equity value of $791 million. The company plans to efficiently manage its debt, as only $46 million of its debt is due to mature until 2025.

To address the financial restructuring, Core Scientific intends to issue new shares to its common shareholders. These shares will be exchanged at a ratio of 25:1, equivalent to $1.08 per share prior to the exchange.

For noteholders with notes due in April, they will receive $1.628 for every $1 of face value. Similarly, noteholders with notes due in August will receive $1.201 for every $1 of face value. These distributions are expected to take place on January 3, 2024.

In terms of operational restructuring, Core Scientific currently operates seven plants across five states in the United States, with a combined capacity of 724 megawatts (MW). The company plans to increase its capacity by an additional 372 megawatts by the end of fiscal year 2027, which is projected to boost its income from $583 million in 2024 to $968 million in 2027.

Unfortunately, the company’s impending bankruptcy was due in part to its refusal of a rescue offer from the B. Riley financial services platform. Additionally, poor revenue and falling Bitcoin values also contributed to the financial challenges faced by Core Scientific.

Despite these setbacks, Core Scientific remains optimistic about its future. As part of the restructuring, the company plans to re-list its shares on Nasdaq, enabling it to retain approximately sixty percent of its stockholders. Adam Sullivan, the Chief Executive Officer of Core Scientific, believes that the increasing demand for Bitcoin and high-value compute will drive shareholder value creation and operational efficiency at full scale.