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Core Scientific Announces Plan to Exit Bankruptcy in January 2024

Core Scientific Plans to Exit Bankruptcy in January 2024

Bitcoin mining giant Core Scientific has released a presentation outlining its plans to emerge from bankruptcy in early January 2024. The presentation is based on the company’s third amended plan, filed on November 16, and includes audio comments from CEO Adam Sullivan.

The plan treats common shareholders and holders of two series of convertible notes separately. Common shareholders will receive new shares at a 25:1 ratio, offering them $1.08 per pre-exchange share. Note holders will receive $1.628 for each dollar of face value for the April-due notes, and $1.201 per dollar of face value for the August-due notes. These payments will be made on January 3, 2024.

Projections and Shareholder Vote

If Core Scientific reaches agreements with key shareholders, the company will emerge from bankruptcy with $709 million in net debt and $791 million in equity value on January 5, 2024. The company plans to add 372 MW of capacity by 2027 and expects its revenue to increase from $583 million in 2024 to $968 million in 2027. Core Scientific currently operates seven facilities with a total operational capacity of 724 MW.

Shareholder voting on the plan is scheduled until December 13, and a decision by the Southern District of Texas Bankruptcy Court is expected on December 22. If approved, the plan will take effect on January 5, 2024. Core Scientific filed for bankruptcy in late December 2022 due to low revenues and declining Bitcoin prices, after rejecting a rescue offer from financial platform B. Riley a week earlier.

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