Crypto mining company Core Sciientific has signed a deal with the New York Digital Investment Group (NYDIG) to pay off outstanding debt of $38.6 million. They will do this by transferring 27,000 mining machines that were used as collateral.
Awaiting approval
According to the mining company, the mining rigs are no longer essential to their operations and plans. They still have to wait for approval from the United States Bankruptcy Court in Texas before the mining machines can actually be sold. However, it is not expected that this will cause any problems.
While the sale of these machines will of course result in large losses in the short term, it is better to pay off their considerable debts in the long term. The crypto mining company therefore believes that the transfer is the first step towards becoming more profitable and sustainable.
It is noteworthy that the company still has mining installations left. They are moving to a smaller fleet of crypto miners, but more efficient ones. These miners were initially in their storage, so they were not used at all. This will therefore change.
Chapter 11 bankruptcy
In December of last year, the company, like FTX, filed for Chapter 11 bankruptcy. In the months before, it became clear that the company was in financial trouble. Some of the important factors of that are the increased electricity costs, an increase in the Bitcoin hash rate and the relatively low Bitcoin prices.
Last month, the court allowed the company to take out a new loan that would replace the old one. This in turn allows Core Scientific to take out a loan from investment bank B. Riley, which is also one of the company’s creditors. It is not yet known whether the company will make a restart or not. However, the first steps seem to have been taken.