In a significant milestone for Core Scientific, Inc., the leading data center and software solutions company for blockchain computing has obtained bankruptcy court approval for its reorganization plan, paving the way for it to emerge from bankruptcy and return to be listed on Nasdaq at the end of January 2024.
This achievement follows an oversubscribed Equity Rights Offering, marking the conclusion of a 13-month restructuring process.
The Bankruptcy Court has confirmed our Chapter 11 plan of reorganization. The Bankruptcy Court's approval of our plan clears the way for Core Scientific to emerge and re-list on Nasdaq by the end of January 2024!
— Core Scientific (@Core_Scientific) January 16, 2024
Under the terms of the plan, shareholders, with an expected record date of January 23, 2024, will receive shares of the company’s new common stock and warrants, constituting about 60% of the new equity.
Upon the cash exercise of all applicable warrants, and using the cash to reduce debt, the latter is expected to be repaid in full, reducing debt by approximately $1 billion since prior to the plan.
The recent full repayment of debtor-in-possession (DIP) financing and the successful $55 million oversubscribed equity rights offering have been key milestones in the restructuring process.
Adam Sullivan, CEO of Core Scientific, highlighted the importance of the approval of the plan by stating that:
“It’s a defining moment in our reorganization.”
The company, which has contributed significantly to the cryptocurrency mining sector in the United States, mining more than 13,700 Bitcoins in 2023, had faced previous financial challenges, including the prolonged bear market, increases in energy costs, and difficulties arising from of bad loans to cryptocurrency company Celsius.
The restructuring is also designed to save more than 240 jobs at Core Scientific
The company, previously listed on the Nasdaq under the symbol “CORZ”, was delisted due to its financial problems.
Now, with the successful confirmation of the reorganization plan, it is preparing to return to trading under the same symbol.
The law firm Weil, Gotshal & Manges LLP, along with financial advisors PJT Partners LP and AlixPartners LLP, played key roles in this process.
Core Scientific attributes the success of its restructuring plan to the notable rise in Bitcoin and hash prices since filing for bankruptcy in December 2022.
This rally in the cryptocurrency market has created more favorable conditions for Core Scientific’s recovery.
The company projects a promising future by highlighting the growing demand for Bitcoin and high-value computing, and is committed to generating value for its shareholders by executing its growth plan, strengthening its balance sheet and delivering efficiency at scale.
With the confirmation of the plan, Core Scientific is ready to emerge as a stronger and more resilient company in the competitive world of blockchain technology.