Bitcoin-based Core Scientific approved to get $37.5 million loan from current creditors
A US bankruptcy court has given interim approval to Bitcoin miner Core Scientific for access to a $37.5 million loan from current creditors for the purpose of funding during liquidity concerns, as reported by Cointelegraph.
According to Cointelegraph, on December 21, 2022, Core Scientific made filings for Chapter 11 bankruptcy due to increasing energy costs, falling revenue and BTC’s declining price in 2022. It is believed that Core Scientific emphasised on its intention to “move swiftly through a restructuring process,” and focus on mining and hosting operations. Reportedly, the loan is from creditors who have over 50% of Core Scientific’s convertible notes, who approved debtor-in-possession (DIP) facility commitment loans for $75 million, as per court filings.
On the basis of information by Cointelegraph, on December 22, 2022, the firm’s application was accepted and that the DIP loan will carry a 10% per annum interest rate. Reportedly, Core Scientific got access to $37.5 million, while it aims to get the remaining $37.5 million in January, 2023.
Moreover, Cointelegraph noted that in Core Scientific’s third-quarter financial report, the platform reported having $1.4 billion worth assets and $1.33 billion worth liabilities as of September 30, 2022. In the third quarter, the firm reportedly had a $434.8 million loss, with total losses being $1.71 million till now this year. In late November, 2022, the firm stated about approaching bankruptcy without fresh cash funding.
(With insights from Cointelegraph)