The crypto landscape is shifting, with a potential new power play by Bitmain and Anastasia Digital. It seems they are positioning to obtain equity stakes in CORZ, world’s second-largest publicly listed bitcoin miner. Core’s imminent bankruptcy is subject to creditors’ vote, and a series of settlements with lenders and suppliers that need court approval.
Core has plans to acquire 27,000 units of Bitmain Antminer S19j XPs, a premier air-cooled model, for $77.1 million. This acquisition’s funding consists of $23 million cash and $54 million in equity. The intriguing part is that Bitmain might be accepting equity as payment, indicating an interest in a publicly listed miner – a first for Bitmain.
Financial institutions that have previously backed Core have two primary options: convert their claims into equity, or opt for secured debt in the emerging company at 80% of the value of their claims. So far, it seems that only Anastasia Digital, with a $29 million loan, might choose the equity route.
Other substantial lenders to Core, including Mass Mutual Asset Finance, Ashton, BlockFi, 36th Street Capital Partners and Trinity Capital, are anticipated to favour secured debt. It’s interesting to note that these financial choices could undoubtedly shape the structure and future of Core Scientific.
Additionally, Core is exploring a $55 million equity rights offer for current common stock holders. Agreements are also underway with B. Riley, the investment bank that initially lent $70 million to assist with bankruptcy costs. The bank is set to convert the outstanding loan balance and extend an additional $25 million in fresh financing.
If the secured noteholders approve the restructuring plan, they have alternative options. They can either accept new secured debt at 75% of the value of their claims or opt for equity. The non-approving noteholders will receive their share of secure notes issued by the reorganized firm.
Finally, Core is in active negotiations with Foundry, aiming for a full recovery of Foundry’s claim. The company is also finalizing settlements with equipment and service providers.
The bankruptcy filing of Core Scientific in December 2022 was a hint of the severe struggle faced by the industry, with rising energy costs and declining bitcoin prices. However, the impending shake-up might provide the breathing space needed for survival, notwithstanding the ambitious catch up of MARA. The upcoming developments in this saga deserve close attention.
Source: Coindesk
