Business
Core Scientific Announces Comprehensive Restructuring Transaction
Voluntarily Files for Reorganization under Chapter 11Will Enable the Company to Continue to Operate Normally While Navigating the Challenges Facing Its
About this update from Core Scientific, Inc.
[{"type":"text","content":"Voluntarily Files for Reorganization under Chapter 11Will Enable the Company to Continue to Operate Normally While Navigating the Challenges Facing Its IndustryAUSTIN, Texas, Dec. 21, 2022 /PRNewswire/ -- Core Scientific, Inc. (NASDAQ: CORZ)(\"Core Scientific\" or \"the Company\"), a leader in high-performance blockchain computing data centers today announced that, after a comprehensive review of potential alternatives and exhaustive discussions with various Company stakeholders, the Company expects to enter into a restructuring support agreement (the \"Restructuring Support Agreement\") with the Ad Hoc Noteholder Group, representing more than 50% of the holders of its convertible notes. \nTo implement the comprehensive restructuring transaction contemplated by the Restructuring Support Agreement, on December 21, 2022, the Company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. The Company plans to move swiftly through the restructuring process. \nDuring this process and upon emergence, the Company will continue to operate its existing self-mining and hosting operations, which remain significantly cash flow positive on a debt-free basis. The Company is committed to operating normally during the implementation of its restructuring. The Company remains dedicated to providing hosting services and self-mining in its state-of-the-art data centers. \nIn connection with the Restructuring Support Agreement, the Ad Hoc Noteholder Group has agreed to provide commitments for a debtor-in-possession facility (the \"DIP Facility\") of up to $56 million and has agreed to support the syndication of up to an additional $19 million in new money DIP Facility loans to all holders of convertible notes. These funds, along with ongoing cash generated from operations, are anticipated to provide the necessary financing to effectuate the planned restructuring, facilitate the emergence from Chapter 11, and cover the fees and expenses of legal and financial advisors. \nThe Restructuring Support Agreement will be subject to a \"fiduciary out\" for the Company to pursue better alternatives. As contemplated, the restructuring will reduce the Company's funded indebtedness by hundreds of millions of dollars and reduce annual interest expense by tens of mil...