Core Scientific released a webcast featuring CEO Adam Sullivan, detailing crucial aspects of their impending emergence from Chapter 11, scheduled for early January.
The presentation, based on the third amended joint Chapter 11 plan filed on November 16, provides insights into the company’s strategy.
Core Scientific is a leading provider of high-performance blockchain infrastructure and software solutions, with a focus on securing and powering the Bitcoin network.
The company develops and operates large-scale blockchain data centers to produce digital assets for both the company and its clients.
It offers purpose-built blockchain computing infrastructure, digital asset self-mining operations, and fully managed hosting solutions for digital asset mining and blockchain applications.
Core Scientific is also involved in technology development, aiming to optimize and serve digital asset mining and provide leading-edge protocols and services for the evolving financial ecosystem.
Amid the crypto bear market, the company encountered financial challenges, leading to its Chapter 11 bankruptcy filing in 2022.
Facing low revenue and the impact of Bitcoin prices, Core Scientific initiated its bankruptcy proceedings in late December 2022.
Despite this setback, the company has undertaken operational enhancements, showcasing reduced costs and improved margins compared to the preceding year.
It’s important to note that Core Scientific’s financial success remains closely tied to the performance of Bitcoin, introducing inherent risks for investors.
The company, however, has adopted strategic initiatives such as divesting a mining facility in Texas and outlining plans to acquire high-efficiency miners, suggesting a potential resurgence in its fortunes.
According to the firm, common shareholders and holders of two series of convertible notes are being addressed separately in the plan.
The former are expected to receive new shares exchanged at a ratio of 25:1, providing them with $1.08 per pre-exchange share.
Noteholders are set to receive $1.628 for every $1 of face value for notes due in April and $1.201 per $1 face value for notes with an August due date. These payouts are scheduled for January 3, 2024.
It added that provided agreements with key shareholders are reached, it will emerge from bankruptcy with $709 million in net debt and $791 million in equity value on January 5, 2024.
The plan outlines manageable debt maturity, with only $46 million expected to mature through 2025.
Additionally, it is expected that shareholders will cast their votes on the plan by December 13, and the Bankruptcy Court will decide on December 22. It’s worth noting that the mining firm runs a facility of 724 MW, and has plans to add an additional 372 MW by the fiscal year 2027.
