By Michael Scott
The leading crypto-miner in capacity claims that its improved liquidity position is attributed to favorable conditions in the market, and it has also been necessary to revise its bankruptcy restructuring plan.
Overcoming the Shackles of Bankruptcy Proceedings
Core Scientific’s bankruptcy proceedings may be concluded by September. The Bitcoin miner considers the present favorable conditions in the market may result in an additional 46 million dollars in exit proceedings.
A filing before a Texas Bankruptcy Court by Core Scientific’s attorneys on May 22 revealed a considerable improvement in liquidity position since it filed for bankruptcy. As such, it plans to file a reorganization strategy soon.
Key stakeholders are part of the plan negotiation process, and the filing reveals that the organization aims to develop an agreement concerning the status of Core Scientific following bankruptcy proceedings.
A Chapter 11 bankruptcy permits an organization to keep operating until stakeholders can agree on a restructuring plan that may entail some interventions. Examples include downscaling an organization’s operations to minimize debt or repaying creditors by liquidating assets.
Rising Bitcoin Prices and Reduced Power Costs Boosts Core Scientific Liquidity
The organization claimed the liquidity boost was linked to rising Bitcoin prices, reducing power costs, and increasing the blockchain’s hash rate. Core Scientific filed for bankruptcy on December 21 2022, a time when the price of Bitcoin was 16904 US dollars.
Since then, the price has risen to nearly 27000 US dollars, an increase of more than 60 percent. Besides, the filing also shows that there has been a 24 percent reduction in the prices of power since the date of the petition, and the network hash rate has risen by 54 percent.
Considerable Bonus Due from Celsius Network
Owing to highly favorable conditions in the market, the company believes that finalizing the restructuring plan will lead to an extra 46 million dollars in funds. This is despite the interruptions experienced in the bankruptcy proceedings.
Core Scientific is also anticipating a considerable bonus from Celsius Network. In this case, it claims that this crypto lender owes it nearly 11 million dollars. The two organizations are currently involved in a protracted court battle that started on October 19, 2022. Core Scientific initially accused the latter of not paying its power bills during this period.
Core Scientific Set to Increase Rigs Hosting
The recovery of Core Scientific from the ongoing bankruptcy proceedings is timely when the crypto miner signed contracts with other rig owners. Recently, it reached a deal to host 18,000 Bitcoin (BTC) mining rigs from three firms.
The addition comprises 6,914 mining rigs from Greenidge Holdings, 10000 from Ault Alliance, and 1012 from LM Funding. Their installation will increase the hosted rigs to 70000, besides the 155,000 machines for self-mining.