Core Scientific, a leading Bitcoin (BTC) miner, has revealed its strategy to come out of bankruptcy in early January 2024. The company recently released a presentation detailing its third amended joint Chapter 11 plan, which includes an audio commentary by CEO Adam Sullivan.
Separate plans for common shareholders and note holders
Under the proposed plan, common shareholders and holders of two series of convertible notes will be treated separately. Common shareholders will be given new shares at a ratio of 25:1, equalling $1.08 per pre-exchange share.
Noteholders, on the other hand, will receive $1.628 for every $1 of face value for notes due in April, and $1.201 per $1 face value for notes with an August due date. These payouts are scheduled for January 3, 2024.
Financial outlook and growth projections
If Core Scientific successfully reaches agreements with key shareholders, it aims to emerge from bankruptcy on January 5, 2024, with $709 million in net debt and $791 million in equity value. The company anticipates that only $46 million in debt will mature through 2025.
As of now, Core Scientific operates seven facilities across five states, with a total operational capacity of 724 MW. The company plans to add 372 MW of capacity by fiscal year 2027, expecting its revenue to rise from $583 million in 2024 to $968 million in 2027.
Reasons for bankruptcy and the road ahead
Core Scientific filed for bankruptcy in late December 2022, citing low revenue and declining Bitcoin prices as the main reasons for its financial downfall. The company had previously turned down a bailout offer from the B. Riley financial services platform a week prior to filing for bankruptcy.
Shareholders have until December 13 to vote on the proposed plan, and the Bankruptcy Court of the Southern District of Texas will make a final decision on December 22. If approved, the plan will take effect on January 5, 2024.
