Embattled BTC miner Core Scientific seeking approval for $70M loan from B. Riley

Publicly traded embattled Bitcoin (BTC/USD) miner Core Scientific (NASDAQ: CORZ) is seeking approval from the Bankruptcy Court for the Southern District of Texas Houston Division for a $70 million loan from investment bank B. Riley.

If approved, the loan will replace a financing plan that the BTC miner had put forth in December last year as it goes through the Chapter 11 bankruptcy process.

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Buying time to get through the tough times

Besides enabling the miner to pay off the existing debtor-in-possession (DIP) facility, it will also provide the miner with a 15 months window and significant flexibility.

The Core Scientific downfall came after last year’s crypto meltdown that saw bitcoin prices plunge taking down the bitcoin mining industry with it. In the third quarter of 2022, the bitcoin miner registered a $434 million loss.

The company went ahead to file for bankruptcy protection in December with liabilities of as much as $10 billion and 1500 to 5000 creditors. At the time of filing for Chapter 11 bankruptcy, Core Scientific accounted for about 10% of the computing power on the Bitcoin blockchain.

Loan details

According to Core Scientific, the loan:

“Contains economic terms that are reasonable and generally superior to those provided under the original DIP facility… The Replacement DIP Facility lays the foundation on which the debtors will seek to negotiate a consensual Chapter 11 plan with all of their key constituents and maximize value for all stakeholders.”

The hearing for the loan application is scheduled for February 1.