Core Scientific’s Bitcoin Recovery Plan for 2024

Core Scientific, a Bitcoin miner, has disclosed in a presentation its strategy for emerging from insolvency in early January 2024. Based on the third amended joint Chapter 11 plan that was filed on November 16, the presentation features CEO Adam Sullivan’s audio commentary.

Planned separately are the common shareholders and proprietors of two series of convertible notes. In exchange for their pre-exchange shares, common shareholders will receive new shares at a ratio of 25:1. This will equate to $1.08 per share.

Planned Core Scientific indicators through 2027. Source: Core Scientific

For notes due in April, noteholders will receive $1.628% of the face value for each $1 of face value, while for notes due in August, the rate is $1.201% per $1 of face value. The date of those distributions is January 3, 2024.

On January 5, 2024, Core Scientific will emerge from insolvency with $791 million in equity value and $709 million in net debt, pending agreements with key shareholders. A total of $46 million in debt is scheduled to mature by 2025.

Seven facilities in five states are under the operation of Core Scientific, which has a total operational capacity of 724 MW. The company anticipates adding 372 MW of capacity and increasing its revenue from $583 million in 2024 to $968 million in 2027 by the end of its fiscal year 2027.

Core Scientific initiated the bankruptcy process towards the end of December 2022. Low Bitcoin prices and revenue were cited as the reasons for the company’s demise. The company turned down a bailout proposal from the B. Riley financial services platform a week earlier.

On December 22, the Bankruptcy Court of the Southern District of Texas will decide the plan. Voting by shareholders is open until December 13. The proposal, if approved, will be implemented on January 5, 2024.