Core Scientific to borrow $70M from investment bank B. Riley – CryptoNewsTo

Core Scientific to borrow $70M from investment bank B. Riley

Core Scientific (NASDAQ: CORZW) has entered an agreement with investment bank B. Riley to borrow $70 million, the bankrupt BTC block reward miner confirmed in a recent court filing.

Last December, after announcing that it had depleted its cash reserves, Core filed for bankruptcy. It estimated its liabilities to be between $1 billion and $10 billion, owed to 1,000-5,000 creditors. The company was one of the biggest casualties of the 2022 bear market, and before its collapse, it accounted for 10% of the BTC computing power.

In its filing with the Bankruptcy Court for the Southern District of Texas, the miner revealed that the loan from B. Riley would go toward paying off its existing debtor-in-possession (DIP) financing loan. This loan, worth $35 million, had also been extended by B. Riley.

The remaining amount will be available to the miner in one or more borrowings. Core expects this amount to provide it with 15 months of runway and significant flexibility in its operations as bankruptcy proceedings continue.

The announcement is the culmination of “extensive marketing and hardfought negotiations with numerous potential lenders,” the miner stated in its filing. Core also revealed that an ad hoc committee of shareholders supports the new loan proposal.

B. Riley offered the miner a $72 million credit facility back in December, which Core turned down. At the time, the bank revealed that it was willing to offer $40 million upfront and with zero contingencies. The rest of the amount would be available on condition that Core suspended all payments to equipment lenders until BTC’s price hit $18,500, which it has since done.

Core requested a February 1 hearing for its request.

While the company works towards a cash infusion, a New York law firm is investigating it for securities fraud. Pomerantz LLP accuses the miner of “wildly overselling both its mining and hosting businesses.”

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