BTC miner Core Scientific gets interim nod for $37.4M bankruptcy loan
A U.S. bankruptcy court has granted Bitcoin (BTC) miner Core Scientific interim approval to access a $37.5 million loan from existing creditors to fund the firm amid its liquidity issues.
Core Scientific is one of the largest cryptocurrency mining companies in the United States, but filed for Chapter 11 bankruptcy on Dec. 21 as a result of rising energy costs, declining revenue and the price of BTC in 2022.
In a public statement made on that same day, Core Scientific outlined that it intends to “move swiftly through the restructuring process” and maintain its self-mining and hosting operations.
The loan comes from a group of creditors called the Ad Hoc Noteholder Group — which holds more than 50% of Core Scientific’s convertible notes — which agreed to provide debtor-in-possession (DIP) facility commitment loans up to a total of $75 million, according to court filings.
The firm’s application was approved on Dec. 22 and court filings show that the DIP loan will have a 10% per annum interest rate attached.
Core Scientific will be able to access $37.5 million immediately to keep the lights on, while it intends to apply to access the remaining $37.5 million in January as per a Dec. 23 report from Reuters, citing a company attorney.
In the initial DIP budget however, it was forecasted to apply for $12.5 million by Jan. 21.
The Reuters report also suggests the creditors understand the challenges of the bear market and are looking at a long-term play with Core Scientific.
Kris Hansen, a representative of the creditors, told the news outlet that the existing stakeholders “have faith” in the company’s future despite its recent troubles.
In its Q3 financial report, Core Scientific reported having $1.4 billion worth of assets and
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