Just 2 days before Christmas (2022), I published 'Bitcoin miner Core Scientific approved for $37.5M loan' in which I outlined steps the company was taking to avoid total collapse. Going public in July, 2021 with a value of $4.3B and initially enjoying success when Bitcoin peaked later in November of the same year, the company's value then dropped to just $78M by the time my post was published as a result of the massive drop in the Bitcoin price and higher utility fees.
The company does continue to generate positive cash flow but not quite enough to service its debt obligations. According to an article published on Kitco News yesterday, Core Scientific is the largest Bitcoin miner by computing power via a total of 153,000 mining rigs. The company has come up with a plan to wipe out $38.6M of debt by surrendering 27,403 cryptocurrency mining rigs to lender / creditor NYDIG.
In October, 2020 Core Scientific borrowed $77.5M from NYDIG to buy mining rigs. Under bankruptcy protection, payments on debt obligations were halted since October / November 2022. This deal allows the company to wipe out its debts owing to NYDIG. It's actually a good deal because the principal on the loan exceeds the value of the rigs. On top of that, the company states these rigs are no longer needed anyways.
Core Scientific became the first publicly traded cryptominer to file for bankruptcy on December 21, 2022. They continue to operate normally and under restructuring, hope to be able to run operations on a debt free basis. Core was hit hard by the fall in price of Bitcoin but fortunately for them, Bitcoin has recovered some $7,000 and presently sits at $23,001 at time of writing.
While the deal is agreed upon by both parties, it stills needs to go through the approval process in bankruptcy court. It should be approved without any issues as this is a win / win for all parties and will likely go through in a matter of days or a few weeks at the latest.
In the meantime, the company will still have more than 125,000 mining rigs which would leave them in an excellent position. As Bitcoin rises further, we should expect to see Core Scientific do well and be able to put this whole bankruptcy issue behind them.
There's more in the Kitco article. The link is below in the references section.
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