Bitcoin miner Core Scientific, amidst its bankruptcy proceedings, has shared a detailed presentation outlining its strategy for emerging from bankruptcy by early January 2024. This plan, based on the third amended joint Chapter 11 plan filed on November 16, includes an audio commentary from CEO Adam Sullivan.
The approach to addressing the interests of common shareholders and convertible note holders is being handled distinctly. Common shareholders are set to receive new shares on a 25:1 exchange ratio, effectively valuing each pre-exchange share at $1.08. For note holders, the compensation varies based on the due date of the notes: those due in April will receive $1.628 for every $1 of face value, and notes due in August will get $1.201 per $1 face value. These payments are scheduled for January 3, 2024.
Should Core Scientific successfully negotiate with key shareholders, the company anticipates emerging from bankruptcy with a net debt of $709 million and an equity value of $791 million as of January 5, 2024. The company’s debt obligations through 2025 are relatively modest, amounting to only $46 million.
Core Scientific, which operates across seven facilities in five states, boasts an operational capacity of 724 megawatts (MW). The company has plans to expand its capacity by an additional 372 MW by the fiscal year 2027. This expansion is expected to significantly boost its revenue, projecting an increase from $583 million in 2024 to $968 million in 2027.
The bankruptcy filing by Core Scientific in late December 2022 was attributed to a combination of low revenue and declining Bitcoin prices. Prior to the filing, the company had turned down a bailout proposal from B. Riley financial services.
Shareholders have until December 13 to vote on the proposed plan. The Bankruptcy Court of the Southern District of Texas is scheduled to make a decision on the plan on December 22. If approved, the plan will be implemented on January 5, 2024.
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