Core Scientific Hands Over 27K Mining Rigs to NYDIG to Pay off a Debt

Core Scientific Hands Over 27K Mining Rigs to NYDIG to Pay off a Debt


The once-prominent bitcoin miner Core Scientific inked an agreement with the New York Digital Investment Group (NYDIG) to hand over 27,403 of its mining machines and thus pay off an outstanding debt of $38.6 million.

The company filed for bankruptcy protection a few days before Christmas 2022.

looking for a way out

According to a filing with the bankruptcy court for the southern district of Texas, Core Scientific agreed to transfer over 27,000 of its mining rigs (around 18% of its total equipment) to NYDIG to eliminate its debt. The deal needs to be approved by the relevant magistrates before becoming official.

Core Scientific claimed those machines are no longer vital for its business, highlighting the importance of paying off the loan.

It borrowed $77.5 million from the investment management firm in 2020 to expand its business. However, it stopped setting the debt towards the end of 2022 due to shrinking revenue caused by the bear market.

The miner’s net losses climbed to $1.7 billion as of Q3 2022. It sold nearly 8,000 BTC (almost its entire stash) to stay afloat, but that could not halt the freefall.

The low price of the primary cryptocurrency (compared to the 2021 bull run) and the rising energy costs pushed Core Scientific towards filing for Chapter 11 bankruptcy protection at the end of December.

Its shares plunged to $0.05 upon announcing the news. However, the improving condition of the cryptocurrency market at the start of 2023 has caused a price surge for CORZ. Currently, stocks are worth approximately $0.47 (an 840% increase compared to the December figures).

Mining Goes on Despite the Bankruptcy

Despite its issues, the US-based organization produced 1,356 BTC in November and 1,435 BTC in December. Its self-mining computing power for the last month of the year was 15.7 EH/s, compared to 15.4 EH/s in the previous 30 days. This coincides with the company’s intentions to continue producing bitcoin to repay its debtholders.

Core Scientific secured a $500 million fundraiser led by financial giants, such as BlackRock, Ibex Investors, Kensico Capital, and Apollo Capital. The world’s largest asset manager loaned $38 million by purchasing secured convertible notes from the miner. The leading contributor to the financing was Ibex Investors, which lent almost $100 million.


Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.


Source link

Leave a Comment