Connect with us


Core Scientific to borrow millions from investment bank after court approval



Source: Unsplash
  • Core Scientific has received permission from the bankruptcy court to borrow up to $70 million from B. Riley.
  • The new credit facility will replace an existing one that was extended by B. Riley in December 2022.

The U.S. Bankruptcy Court for the Southern District of Texas has granted Core Scientific the green light to go ahead with a $70 million credit facility from middle market investment bank B. Riley.

The loan will go toward replacing an existing credit facility that the bankrupt crypto miner had secured from the investment bank in December 2022.

Permission granted after emergency hearing

Core Scientific, the popular crypto miner that filed for bankruptcy in December 2022, had requested the bankruptcy court to schedule an emergency hearing to allow the replacement of the credit facility with B. Riley.

According to the court filing, the mining firm intends to use the new credit line to settle the existing debtor-in-possession (DIP) facility with the investment bank.

The filing further revealed that the replacement DIP facility will provide an aggregate principal amount of $35 million. The loan will be made on an interim basis in a single borrowing. Additionally, the remaining amount from the original $70 million will be available in one or more borrowings. 

According to Core Scientific:

“The Replacement DIP Facility is the result of extensive marketing and hardfought negotiations with numerous potential lenders.”

Moreover, the company’s shareholders are reportedly on board with the plan to replace the existing credit facility in favor of the new arrangement. 

New credit line to provide liquidity during chapter 11 proceedings

The filing further read:

“The Debtors (Core Scientific) require access to the Replacement DIP Facility to pay off the Original DIP Facility and to ensure they have sufficient liquidity to operate their businesses and administer their estates in the ordinary course for the duration of these chapter 11 cases.”

The miner believed that the replacement DIP facility will provide up to 15 months of runway and significant flexibility since it has no plan-related milestones. It is not conditioned on seeking approval of any specific chapter 11 plan.

It reportedly contained economic terms that are reasonable and superior to those provided under the Original DIP Facility.

Read the best crypto stories of the day in less than 5 minutes

Subscribe to get it daily in your inbox.

Please select your Email Preferences.

Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot's writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S - There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

Click to comment

Leave a Reply

Your email address will not be published.

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.