Bitcoin Miner Core Scientific Cuts Debt By Offloading 27K Mining Machines To NYDIG

Feb. 7, 2023
Bitcoin Miner Core Scientific Cuts Debt By Offloading 27K Mining Machines To NYDIG

In a major debt-cutting move, Bitcoin mining firm Core Scientific has entered into an agreement with the New York Digital Investment Group (NYDIG) to settle a $38.6 million debt. The deal will see the transfer of over 27,000 mining machines, used as collateral, to NYDIG.

The mining rigs, no longer considered essential to Core Scientific’s operations and plans, were outlined in a court filing. The company seeks court approval to transfer assets in the Southern District of Texas.

Core Scientific sees long-term benefits of debt payoff outweighing short-term revenue loss. The firm sees the transfer as a crucial first step toward financial stability and profitability.

Core Scientific streamlines operations by shifting to smaller, efficient storage rigs instead of Bitcoin mining. In addition, the company plans to offset some of the losses from the asset transfer by installing the S19 XP mining rigs, currently unused.

Nevertheless, the debt settlement with NYDIG marks a positive step in the company’s journey toward a sustainable and profitable future.

Bitcoin Miner’s Court Approval For $70M Loan

On Jan. 31, Bitcoin miner Core Scientific received approval from the Southern District of Texas bankruptcy court to take out a $70 million loan from investment bank B. Riley, one of the company’s largest creditors.

Therefore, the loan will be used to repay the original debtor-in-possession (DIP) financing loan from B. Riley. Core Scientific aims to replace the DIP loan with better terms and more flexibility in the Chapter 11 process. Related Reading | The First National Park To Launch A Bitcoin Mine

However, the company plans to use $35 million to repay the initial loan, with the remaining funds available for future borrowings.

Core Scientific’s motion stated that the new loan was secured through extensive marketing and tough negotiations with multiple prospective lenders.

The creditors’ and shareholders’ committees approved it, ensuring that the company has enough funds to run its operations and manage its assets during the Chapter 11 proceedings.

Ammar Raza

Associate editor
Skilled in crafting compelling content, with a deep enthusiasm for blockchain technology. I offer precise and easily comprehensible perspectives on cryptocurrencies, decentralized finance, and the ever-evolving landscape. Count on me as a reliable resource to remain informed about the latest advancements in the world of crypto.