A US bankruptcy court has awarded Bitcoin (BTC) Miner Core Scientific provisional approval to access a $37.5 million loan from existing creditors to finance the company amid its liquidity problems.
Core Scientific is one of the largest cryptocurrency mining companies in the United States, but requested Chapter 11 bankruptcy on December 21 as a result of rising energy costs, declining revenue, and the price of BTC in 2022.
In a public statement done that same day, Core Scientific noted that it intends to "move quickly through the restructuring process" and maintain its self-mining and hosting operations.
The loan comes from a group of creditors called the Ad Hoc Noteholder Group, which owns more than 50% of Core Scientific's convertible notes, which has agreed to provide debtor-in-possession (DIP) facility pledge loans up to a total of $75 million. , according to court documents.
The signature request was approved on December 22 and court papers Show that the DIP loan will have an interest rate of 10% per year attached to it.
Core Scientific will be able to access $37.5 million immediately to keep the lights on, while it intends to apply for access to the remaining $37.5 million in January according to a Dec. 23 report from Reuters, citing a lawyer for the company.
However, in the initial DIP budget, it was forecast that $12.5 million would be applied by January 21.
The Reuters report also suggests that creditors understand the challenges of the bear market and are looking for a long-term game with Core Scientific.
Kris Hansen, a representative for the creditors, told the news outlet that existing stakeholders "have faith" in the company's future despite its recent troubles.
In your financial Q3 reportCore Scientific reported having $1.4 billion in assets and $1.33 billion in liabilities as of September 30, showing a tight balance sheet amid the bull market.
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Most notably, the company reports a loss of $434.8 million in the third quarter which, when added to losses from the previous two quarters, total losses reach $1.71 billion year-to-date. As such, the company indicated in late November that it was likely headed for bankruptcy without a new cash injection.
The firm has reportedly mined almost 12,000 BTC this year, marking a significant improvement in the 5,769 BTC mined in 2021however, that, of course, has not been able to save Core Scientific from its financial problems.
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