Core Scientific, a bankrupt cryptocurrency miner, is set to purchase 27,000 Bitcoin mining servers from Bitmain in a substantial transaction valued at $77 million, as disclosed in a recent press release. The acquisition comprises $23.1 million in cash and $53.9 million in common stock.
Core Scientific's Path to Recovery: Strategic Acquisition
This deal, which was originally announced last month as part of Core Scientific's bankruptcy plan, is a significant step in the company's restructuring efforts. There were also discussions regarding crypto firm Anchorage Digital potentially taking equity in the company.
Core Scientific anticipates the delivery of these mining units, which could potentially add 4.1 exahashes to its hash rate, during the fourth quarter of this year.
The company faced financial challenges and filed for bankruptcy in December of the previous year. A federal judge overseeing the case indicated the possibility of Core Scientific emerging from bankruptcy as early as this month, signifying a potential turnaround for the firm.
This strategic move to acquire Bitmain's mining servers underscores the resilience of the cryptocurrency mining industry and its ongoing evolution, even amid challenging market conditions.
The transaction is expected to play a pivotal role in Core Scientific's path to recovery and growth in the crypto mining space.
Bitmain's CEO, Max Hua, said: “Core Scientific is an important contributor to the strength and stability of the Bitcoin Network, and we look forward to working closely with their team to help realize Bitcoin’s full potential."
The firm recently reported positive results, with increased bitcoin production and an expanded mining operation. Core Scientific had been one of the largest cryptocurrency mining companies before market instability caused by the FTX collapse led to its bankruptcy.
Core Scientific to Settle Debts in Bankruptcy Plan, Citing Improved Liquidity
Finance Magnates reported in June that Bitcoin miner Core Scientific, currently undergoing Chapter 11 bankruptcy proceedings, had revealed a joint plan that promises full and final satisfaction of allowed debtor-in-possession (DIP) claims.
Filed in a Texas bankruptcy court, the plan attributes its improved financial outlook to factors, such as rising Bitcoin prices, an increased Bitcoin network hash rate, and reduced mining costs.
Holders of DIP claims will receive full payment in cash or other mutually agreed alternatives, with any liens securing these claims being terminated. Chapter 11 bankruptcy allows the company to continue operating while reorganizing its debt.
In May, Judge David Jones urged Core Scientific to accelerate its emergence from bankruptcy, with the company's legal team aiming for a reorganization plan by September.
With Bitcoin prices and mix-up rates on the rise and lower electricity costs, Core Scientific aims to increase profitability and generate revenues to repay its debt of $6 million.
