Last year, the largest public bitcoin miner in the world, Core Scientific, suddenly ran into financial trouble. Still, it managed to find a way to continue soon after. Unfortunately, this wasn’t enough to keep out of trouble, that’s why it is now taking major steps to enable a reorganization.
Bitcoin miner in distress
Core Scientific is with distance the largest publicly traded bitcoin miner in the world. According to a recent report from Luxor Mining had a hash rate of 15.7 exahash per second (EH/s) on December 31. That was significantly more than the next one on this list, Riot Platforms, which was able to process 9.7 EH/s at the time.
But the high energy costs, the low bitcoin price and a lot of competition had left deep marks in Core Scientific’s balance sheet. In December it even went so far as to file for bankruptcy, but in January it suddenly raised $500 million from BlackRock, Apollo Capital and several other major financial institutions. The plan was to restart, although that also meant selling about 18% of its production capacity in order to continue financially.
Core Scientific restarts
That loan came at the right time. The company released an update for its on Tuesday Chapter 11 bankruptcy filed in bankruptcy court in Houston, Texas. According to the filing, the plan would have been discussed with the major shareholders and creditors. The miner says in the document that he wants ‘as much agreement as possible’ about what the company should look like after the reorganization.
A Chapter 11 bankruptcy is not necessarily the complete liquidation of a company. Under this procedure, it is allowed to continue its activities until investors can agree on the future of the company. Of course, everything in this case goes through the courtroom.
For Core Scientific, this means that certain creditors have claims against company money, and they will get their money back in full. Leading up to this news, Core Scientific (ticker: CORZ) stock rose about 35%.