(Kitco News) - Core Scientific, the largest Bitcoin miner by computing power, filed a petition with the US Bankruptcy Court for the Southern District of Texas outlining a proposed deal to pay off $38.6 million of its debt. pending through the delivery of 27,403 cryptocurrency mining rigs to lender and creditor NYDIG.
He presentation it was dated February 2 and the machines make up about 18% of its total set of 153,000 mining rigs.
As of October 2020, Core Scientific borrowed $77.5 million from NYDIG to purchase mining equipment, but a combination of rising energy and debt service costs and falling cryptocurrency prices saw the company could not continue with loan payments from the third quarter of 2022.
Core wrote in the filing that exchanging the mining rigs in exchange for "the full extinguishment of the NYDIG Debt will bring substantial benefits to the Debtors and their properties" because these particular machines "are no longer necessary for current operations and business." futures of the Debtors". plansโ and because โthe principal of the NYDIG Debt exceeds the valueโ of the machines. The deal must now be approved by the bankruptcy court.
scientific core filed for Chapter 11 bankruptcy on December 21, becoming the first publicly traded cryptominer to do so.
โDuring this process and upon emergence, the Company will continue to operate its existing hosting and self-mining operations, which remain significantly positive on debt-free cash flow,โ they wrote at the time, adding that the company is โcommitted to operate normally during the implementation of its restructuring.โ
According to a CNBC According to the report, Core Scientific's operations continued to generate positive cash flow, but it was insufficient to pay down the debt the company took on to lease mining equipment. The company estimated their liabilities to be between $1 billion and $10 billion, and they have between 1,000 and 5,000 creditors.
On October 26, Core Scientific filed a presentation with the Securities and Exchange Commission showing they were in dire straits, writing that their operating performance and liquidity had been "severely impacted" by the bitcoin price collapse and rising electricity costs, among other factors. โAs a result, management has been actively taking steps to reduce monthly costs, delay construction expenses, reduce and delay capital expenditures, and increase lodging revenue,โ they wrote.
The company's board of directors also decided to default on its debts in late October and early November. โAs a result, creditors under these lines of debt may exercise remedies after any applicable grace period, including electing to accelerate the principal amount of such debt, sue the Company for non-payment, or take action with respect to collateral. , where appropriate".
As of October 26, 2022, Core Scientific said they had "24 bitcoins and approximately $26.6 million in cash compared to 1,051 bitcoins and approximately $29.5 million in cash as of September 30, 2022."
At the time of writing, Core Scientific's share price was trading at $0.37, down 24% from the session. The all-time high of $14.32 was set in November 2021 when the broader crypto market was reaching its peak.
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