Publicly-traded Bitcoin mining company Core Scientific has been offered an approximately $72 million debt restructuring package to avoid bankruptcy. The loan was offered by financial services platform B. Riley, one of Core Scientific’s biggest creditors.
The financial services platform says it will provide the loan in “new, non-cash pay financing on favorable terms, providing more than two years of runway for the Company to achieve profitability.”
Core Scientific Offered $72M Laon
According to the terms of the agreement, B. Riley will first provide Core Scientific with $40 million “immediately, with zero contingencies.” In addition, the remainder of the proposed new financing would only be provided on the condition that the bitcoin miner will suspend payments to equipment lenders while Bitcoin’s price stays below $18,500.
At the time of writing, bitcoin was trading at $17,547, down more than 2% the day. The last time the leading crypto asset traded above $18,500 was in early November.
Notably, B. Riley already has an outstanding loan of roughly $42 million with Core Scientific.
Core Scientific’s Financial Woes
The latest development comes as Core Scientific is on the verge of going bankrupt due to unfavorable market conditions, which started at the beginning of this year and its inability to raise funds to repay its creditors.
Last month, the mining firm stated that it had lost about $1.7 billion since the start of the year. The company blamed its crisis on rising energy costs and the decline in bitcoin’s price and hash rates.
Core Scientific currently owes about $1 billion to its creditors and announced the sale of 7,202 BTC in July to repay some of its debts.
“In our opinion, the vast majority of Core Scientific’s issues are self-imposed and can be corrected in conjunction with an open, transparent discussion and ongoing participation with its creditors and equity holders,” B. Riley said.
Meanwhile, Core Scientific is not the only industry miner struggling in the bear market. Recently, Bitcoin miner Bitfarms received a delisting warning notification from Nasdaq after its share price stayed below $1 for 30 consecutive business days. The decline in its shares was triggered by the crypto market conditions.
