Core Scientific Confirms Chapter 11 Reorganization Plan, Set to Emerge and Re-List on Nasdaq

According to CryptoPotato, Core Scientific, a blockchain computing data center and software solution provider, has announced that the United States Bankruptcy Court for the Southern District of Texas confirmed its Chapter 11 reorganization plan. With the Bankruptcy Court's approval, Core Scientific is set to emerge and re-list on the Nasdaq by the end of January 2024. Under the terms of the plan, shareholders as of the expected record date of January 23, 2024, will be granted shares of Core Scientific's new common stock and warrants, making up roughly 60% of the company's new equity. This includes the exercise of warrants given to existing shareholders and the issuance of new shares through the equity rights offering. If all warrants are exercised in cash and the proceeds are utilized to settle debts, the company's existing debt would be completely repaid, marking a reduction of approximately $1 billion from its debt balance before the plan, according to the official press release. Core Scientific's reorganization plan includes the equitizing of around $400 million in secured and unsecured claims while reducing annual debt service by approximately $60 million. Additionally, the infusion of $95 million in new-money exit capital, derived from an oversubscribed $55 million equity rights offering and $40 million in new-money financing through the $80 million Exit Facility provided by certain Convertible Noteholders, is a pivotal element among other aspects, as per its official document. The company's exit from bankruptcy coincided with a rise in Bitcoin prices to $43,000, driven by renewed investor interest following the SEC's approval of spot ETFs in the US and anticipation of the upcoming BTC halving. The approval of the reorganization plan follows the company's recent announcements of fully settling its DIP financing and successfully concluding an oversubscribed $55 million Equity Rights Offering.