
- Core Scientificโs bankruptcy exit plan has been approved.
- The company plans to reduce its debt balance by about $1 billion.
- The company shared an optimistic future post-restructuring.
Bitcoin mining company Core Scientific has announced the approval of its reorganization plan by the U.S. Bankruptcy Court for the Southern District of Texas.
Core Scientific is among the prominent digital asset-focused companies that became bankruptcy victims of the 2022 crypto market turmoil as crypto prices fell following a string of major industry failures, including the collapse of Sam Bankman-Friedโs exchange, FTX.
Core Scientificโs Bankruptcy Exit Plan
According to a press release dated January 16, the Southern District of Texas bankruptcy court has confirmed Core Scientificโs Chapter 11 reorganization plan, paving the way for the company to โemerge and re-list on Nasdaq by the end of January 2024.โ
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Per the restructuring plan, Core Scientific shareholders will receive shares of the companyโs new stock and warrants, constituting about 60% of its new equity.
โAssuming the cash exercise of all applicable warrants, and the cash is used to pay down debt, the Companyโs existing debt would be paid in full, a reduction of approximately $1 billion from its debt balance prior to the Plan,โ the statement read.
In addition to the anticipated reduction of the above debt, the company confirmed that it had fully paid off its DIP financing and โsuccessfully completed an oversubscribed $55 million Equity Rights Offeringโ before the bankruptcy plan approval.
Core Scientific Chief Executive Officer Adam Sullivan welcomed the development, terming it a โdefining momentโ for the company as it looks forward to tapping into the rising demand for Bitcoin and high-value computing.
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