- Core Scientific’s 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-Fried’s exchange, FTX.
Core Scientific’s Bankruptcy Exit Plan
According to a press release dated January 16, the Southern District of Texas bankruptcy court has confirmed Core Scientific’s Chapter 11 reorganization plan, paving the way for the company to “emerge and re-list on Nasdaq by the end of January 2024.”
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Per the restructuring plan, Core Scientific shareholders will receive shares of the company’s new stock and warrants, constituting about 60% of its new equity.
“Assuming the cash exercise of all applicable warrants, and the cash is used to pay down debt, the Company’s existing debt would be paid in full, a reduction of approximately $1 billion from its debt balance prior to the Plan,” 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 “successfully completed an oversubscribed $55 million Equity Rights Offering” before the bankruptcy plan approval.
Core Scientific Chief Executive Officer Adam Sullivan welcomed the development, terming it a “defining moment” for the company as it looks forward to tapping into the rising demand for Bitcoin and high-value computing.
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