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The largest crypto miner in terms of hashrate, Core Scientific, went on to file for bankruptcy under Chapter 11 Bankruptcy Code last week. More or less the action was inevitable given most miners are struggling to keep the operations continue and sustain with profitability. Increasing energy prices in addition to continuously dropping Bitcoin (BTC) prices made it difficult for Core Scientific, like many miners, to stay in space.
However, the crypto miner was seeking support from its convertible noteholders as in two debtor-in-possession (DIP) facilities. This is expectedly total for 75 million USD.
Meanwhile, leading investment manager BlackRock reportedly came up with the commitment of 17 million USD for the beleaguered bitcoin miner. The loan came as part of a 75 million USD worth loan from the secured convertible holders.
Data shows that BlackRock is the largest shareholder of Core Scientific. Currently the investment giant holds about 37.9 million USD in overall secured convertible notes of bitcoin miner. The recent offering of 17 million is part of the same convertible notes arranged prior to the bankruptcy process of the miner.
Chief mining officer at Core Scientific, Russell Cann said that the restructuring plan intends to provide equity to convertible noteholders of secured debt. In return the currency equity and unsecured holders were said to receive warrants making them get more shares in the company as it would grow in future.
By the time, the lenders committed about 57 million USD out of 75 million USD to the bankrupt crypto miner. This also includes the investment company’s recent loan. The maturity date for the DIP facility is June 21 of the next year with the condition of extension till September.
Late in October, Core announced it would stop making some debt payments and issued its first bankruptcy warning, which caused its shares to drop by roughly 80% on the Nasdaq. It stated once more in November that it might not have enough cash by the end of the year.
Another significant mining company, Compute North, filed for Chapter 11 bankruptcy in late September. Argo Blockchain (ARBK), a cryptocurrency miner, narrowly escaped bankruptcy this week thanks to a $100 million bailout from Mike Novogratz’s Galaxy Digital.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
