Core Scientific Enacts Reorganization Plan and Obtains Court Approval to Exit Bankruptcy

Bitcoin miner Core Scientific announced on January 16 that it had received court approval to proceed with its reorganization plan.

Core Scientific noted that this reorganization plan will allow it to emerge from Chapter 11 bankruptcy proceedings in the coming days.

Adam Sullivan, CEO of Core Scientific, said:

“Today’s confirmation of our plans is a defining moment in our reorganization. “We are poised to emerge as an even stronger company by the end of this month with a motivated team prepared for success.”

Sullivan pointed to growing demand for Bitcoin and “high-value computing” and said the company aims to create value for shareholders amid that demand.

The press release added that the plan will see shareholders receive new shares of Core Scientific’s common stock and warrants, constituting approximately 60% of the company’s new capital. The press release also states that with implementation of the plan, Core Scientific’s existing debt is expected to be repaid in full, reducing the company’s pre-reorganization plan debt balance by $1 billion.

Bloomberg suggested in a separate report that the plan would remove $400 million in debt from Core Scientific’s balance sheet. Bloomberg also stated that the company’s exact Nasdaq relisting date is January 24, 2024.

Core Scientific has been bankrupt for a year.

Core Scientific filed for Chapter 11 bankruptcy in December 2022 but continued to operate throughout the bankruptcy process.

Notably, the company secured millions of dollars in loans from BlackRock and other creditors shortly after filing for bankruptcy to continue its activities.

Recently, Core Scientific signed an extension agreement with Bitmain in September 2023. Under the deal, Bitmain invested $54 million in Core Scientific and provided the company with 27,000 Bitcoin mining rigs.

Core Scientific stock (CORZQ) is down 14.49% today at $1.18. The stock is significantly higher than it has been for most of 2023, but significantly lower than its all-time high of $14.32 on November 19, 2021.