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Troubled US-based Bitcoin (BTC) miner Core Scientific It has been submitted The company is under Chapter 11 bankruptcy restructuring and is currently planning to convert debt into equity for its creditors.
The filing, filed Wednesday in the Southern District of Texas, shows the mining company has agreed to a restructuring plan by a group of creditors to turn debt into 97% ownership of the company.
Under the plan, Core Scientific’s current shareholders will also retain some ownership of the company, avoiding a complete disappearance.
The plan will help eliminate hundreds of millions of dollars in debt for Core Scientific, and will also significantly reduce annual interest expenses.
The company said it was “trying to build as much consensus as possible” on its new management policy after the bankruptcy proceedings, and said it remained optimistic about its future turnaround.
The restructuring proposal still needs court approval.
Plans drawn up six months after bankruptcy
The restructuring plan is the result of negotiations with key stakeholders and was formulated six months after the company first filed for bankruptcy protection.
At the time, the mining company attributed its bankruptcy to $7 million in outstanding debt from bankrupt crypto financier Celsius Network.
It also said it posted a net loss of $434.8 million in the three months ended September 30, 2022 and had only $4 million in liquidity at the time it filed for bankruptcy.
Core Scientific shares, which trade in the over-the-counter (OTC) market under the ticker CORZQ, rose more than 11% on Wednesday when the plans were announced.
The surge continued on Thursday, with the stock gaining 12%, aided by generally bullish sentiment in the bitcoin spot market.
Over the past 12 months, the stock is still down 76%, trading at a price of $0.51.