Bankruptcy Court Approves Core Scientific’s $70 Million Financing
- The package will provide $70 million to fund the operations of the bankrupt crypto miner.
- Core Scientific’s share price rose by over 7% following the approval.
Bitcoin mining firm, Core Scientific, has received the bankruptcy court’s nod to go ahead with its multi-million financing deal with B. Riley Commercial Capital LLC, a subsidiary of the middle market investment bank B. Riley. The latest deal will replace an existing credit facility from the investment bank that was agreed upon in December last year.
According to a recent report, Judge David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas approved the debtor-in-possession (DIP) loan deal, which will allow Core Scientific to borrow an additional $35 million to fund its operations amid the Chapter 11 bankruptcy proceedings.
Judge Jones’ approval brings the total financing package from B. Riley to $70 million. The hearing on Wednesday also saw the judge delay a hearing regarding the appointment of an official committee of stockholders. The hearing in that matter has been slated for March 3. The committee will represent the interests of the stockholders following budget approval.
The bankruptcy judge may sign the final order on the DIP deal later today. The replacement credit facility saw some opposition from bankrupt crypto lender BlockFi, but the issue was reportedly resolved before the hearing. According to the term sheet filed with the court last month, the DIP loan will carry a 10% annual interest.
News of the credit facility approval sent Core Scientific’s share price soaring. At the time of writing, the bitcoin miner’s stock was trading at $0.32, up more than 7% in the past 24 hours.