Mining company Core Scientific files for bankruptcy protection, or will sell 1 GW of mines under construction

余YU

读者

2022-12-22 07:51

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Plans to convert most of its debt into equity.

This article comes fromThe BlockOdaily Translator |

Odaily Translator |

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Summary:
Bitcoin miner Core Scientific said it may sell some of its mining facilities that are still under development.

The company has filed for Chapter 11 bankruptcy protection and plans to convert most of its debt into equity.

The Block has learned that Core Scientific may sell a mine under construction with a power of up to 1 GW (gigawatts) after filing for Chapter 11 bankruptcy protection.

Russell Cann, chief mining officer at Core Scientific, said, "The probability of us selling the assets we are currently operating is close to zero. The probability of us selling the assets under development is very high, which includes power capacity, land and substations."

Cann claims that Core Scientific is currently the largest company in the industry in the United States, with a mining power of about 800 to 850 megawatts. It will not sell existing mining farms, nor will it sell mining machines. The mine it may sell under construction is expected to come online in 2023, with a mining power of up to 1 gigawatts.The company filed for Chapter 11 bankruptcy earlier Wednesday under a prearranged agreement

, its assets and liabilities are estimated to be between US$1 billion and US$10 billion, the number of creditors is between 1,000 and 5,000, and the largest creditor, B. Riley, owes US$42.4 million. The company plans to convert most of its debt into equity. Much of that came from convertible notes. Large creditors such as BlockFi and B. Riley will also have the opportunity to convert into equity.

“Everyone seems willing” to follow this course of action, Cann said. "As long as we can get enough of each class of creditors to agree, we can get the others in a pre-arranged [procedure]. Most people agree, not everyone agrees."

“This deal requires all of our equipment financing lenders to agree, and we can’t quite do that,” Cann said.

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extra cash

However, the company did receive a similar debtor-in-possession financing offer from its convertible note shareholders for a total value of $75 million, according to a statement released Wednesday. "This additional cash will be sufficient to carry us through Chapter 11 while continuing to operate as normal. When we exit Chapter 11, we will be fully solvent with no liquidity issues," Cann said.

Mining company Compute North has already filed for bankruptcy protection. Argo Blockchain and Greenidge Generation recently raised the possibility of imminent bankruptcy. Profit margins in the mining industry are shrinking due to falling bitcoin prices and rising energy costs. The Block Research data shows that the income of Bitcoin miners fell by 20% in the last month alone.

“But those businesses weren’t profitable enough to cover all of the amortization schedule,” he added, “in hindsight it should have been set to 20/20. We were too aggressive in how quickly we amortized these things.”