Core Scientific, a prominent Bitcoin mining firm, has taken a significant step toward emerging from bankruptcy by filing a disclosure statement for its third-amended recovery plan. This latest submission incorporates crucial terms from the Restructuring Term Sheet filed in late October.
The disclosed plan outlines a concrete timeline for garnering support from key stakeholders and aims to complete the bankruptcy proceedings before January 15, 2024.
Advancing Towards Resolution
According to Monday’s filing, the debtors express their commitment to swiftly gather votes and confirm the plan while keeping administrative costs at a minimum.
A pivotal hearing for the conditional approval of Core Scientific’s plan is scheduled for Tuesday. Subsequently, holders of claims or interest will have until December 13 to cast their votes, followed by another hearing to confirm the final approval of the disclosure statement on December 22.
The effective date for the plan is targeted between January 2 and January 13, 2024.
“The [Restructuring Support Agreement] Parties have agreed to use reasonable efforts to emerge from Chapter 11 on or before January 15, 2024,” stated the disclosure statement.
Key stakeholders involved in the voting process include convertible noteholders, secured mining finance lenders, the committee of unsecured creditors, equity holders, and B. Riley, the investment bank holding the largest unsecured claims in the company.
Notably, B. Riley had provided $100 million in equity financing to Core Scientific in June of the previous year. After facing bankruptcy in December, the mining company secured a $70 million loan from B. Riley in March to facilitate its recovery.
However, as per the filing, the current bankruptcy plan lacks support from both the committee of unsecured creditors and B. Riley. Core Scientific is actively engaging in negotiations with these parties to reach a global settlement.
The Blueprint for Recovery
Core Scientific’s recovery plan evaluates the company at $1.5 billion and is strategically designed to significantly reduce its debt while safeguarding more than 240 jobs within the company.
Key features of the plan include the issuance of $150 million in new notes and $260 million in new convertible notes. The new notes will carry a 12% interest rate and mature four years after the plan becomes effective.
Furthermore, the convertible notes provide Core Scientific with the flexibility to repay creditors at either 10% in cash or 6% in cash and another 6% in common stock. These notes are set to mature in five years.
Notably, in January 2023, Core Scientific held a significant position as one of the largest Bitcoin miners globally, contributing to over 5% of Bitcoin’s hash rate alone.