BackBitcoin miner Core Scientific says it may seek bankruptcy
Core Scientific Inc., one of the world’s largest miners of Bitcoin, warned about running out of cash and seeking bankruptcy
PremiumCore Scientific Inc., one of the world’s largest miners of Bitcoin, warned that it may run out of cash by the end of the year and could seek relief through bankruptcy protection.
Operating performance and liquidity have been severely impacted by the prolonged drop in the price of Bitcoin, a rise in electricity costs, increased competition and litigation with bankrupt Celsius Networks LLC, the Austin, Texas-based company said in a US Securities and Exchange Commission filing on Thursday. Shares of Core Scientific tumbled more than 40% in trading before regular market hours.
Bitcoin mining companies such as Core Scientific had recently been increasingly opting to sell equity, resorting to one of their least attractive options to raise money as profits dry up and higher interest rates makes borrowing more expensive. The company entered into a $100 million common stock purchase agreement with B. Riley Principal Capital II in July. Bitcoin has slumped almost 70% since reaching a record high in November 2021.
Core Scientific said it won’t make payments coming due in late October and early November with respect to several of equipment and other financings, including two bridge promissory notes. The company is exploring alternatives, including hiring strategic advisers, raising additional capital or restructuring its existing capital structure.
Core Scientific held 24 Bitcoins and approximately $26.6 million in cash as of Thursday. That’s compared with 1,051 Bitcoins and about $29.5 million in cash as of September, the company said in the filing.
The shares, which traded as much as $14,32, are now down about 37 cents. They’ve tumbled more than 90% this year.
Other Actions by Core Scientific:
- Engaged Weil, Gotshal & Manges as legal advisers, and PJT Partners as financial advisers
- Begun to engage in discussions with creditors regarding initiatives to improve liquidity
- May seek alternative sources of equity or debt financing, delay capital expenditures or evaluate potential asset sales
- Potentially could seek relief under the applicable bankruptcy or insolvency laws
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This story has been published from a wire agency feed without modifications to the text.
