Core Scientific, a prominent Bitcoin mining company, has revealed its comprehensive strategy to emerge from bankruptcy in early January 2024. The company’s revival plan, outlined in a presentation, aligns with the third amended joint Chapter 11 bankruptcy filing made in a United States bankruptcy court on November 16. CEO Adam Sullivan has provided audio commentary on the presentation, shedding light on the company’s future direction.
To address the interests of common shareholders and holders of two series of convertible notes separately, Core Scientific has devised a distinct approach. Common shareholders are slated to receive new shares at a ratio of 25:1, translating to $1.08 per pre-exchange share.
For noteholders, the proposed payouts include $1.628 for every $1 of face value for notes due in April and $1.201 per $1 face value for notes maturing in August. These disbursements are scheduled for January 3, 2024.
Pending agreements with key stakeholders, Core Scientific anticipates emerging from bankruptcy on January 5, 2024, with a net debt of $709 million and an equity value of $791 million. The company’s debt maturity is expected to be modest, with only $46 million due through 2025.
Core Scientific, operating in seven facilities across five U.S. states with a combined operational capacity of 724 megawatts (MW), foresees expansion. The company projects adding 372 MW of capacity by fiscal year 2027, aiming for revenue growth from $583 million in 2024 to $968 million in 2027.
The company’s financial struggles trace back to its December 2022 bankruptcy filing, attributing the downturn to low revenue and Bitcoin prices. Core Scientific had turned down a bailout offer from the B. Riley financial services platform a week before seeking bankruptcy protection.
Shareholders have until December 13 to vote on the proposed plan, with the U.S. Bankruptcy Court for the Southern District of Texas set to make a decision on December 22. If approved, the plan will be set into motion on January 5, 2024.
