Bankrupt Core Scientific Secures $17M Loan from BlackRock

BlackRock, a global investment management firm, is among a group of creditors that lent funds to the insolvent crypto mining firm, Core Scientific so the mining firm can continue its operations while undergoing its bankruptcy proceedings.

A document filed by the US Securities and Exchange Commission (SEC) revealed that BlackRock through its subsidiaries committed $17 million of the $75 million gotten from a debtor-in-possession loan which can be converted to convertible notes.

As per the loan agreement, BlackRock will be getting equity in the form of convertible notes from Core Scientific instead of a return in form of principal and interest. Russel Cann of Core Scientific commented that the current equity and unsecured investors will receive warrants so that when the business grows, they will receive more shares.

So far $57 million have been committed by the group of creditors including BlackRock’s new contribution. $37.5 million will be made available to Core Scientific following bankruptcy court approval on an interim basis.

The DIP Credit Agreement’s maturity date is June 21, 2023. The agreement may however be extended for a period of 3 months under certain circumstances.

Core Scientific Files for Bankruptcy Protection

Crypto mining firm, Core Scientific made an announcement that it was filing for bankruptcy protection as a result of the firm’s low income and the low prices of bitcoin in the crypto market. The mining firm stated that the high cost of electricity and mining equipment contributed to the company’s low income.

B.Riley Financial Inc offered to loan the mining firm $72 million. Core Scientific was expected to pay its creditors from the loan to avoid bankruptcy. 

B. Riley claimed that the mining facility did not need to file for bankruptcy protection, which it claimed was both value-destroying and potentially unnecessary. Furthermore, it stated that there were other viable options, such as an open discussion with its creditors.

Argo Blockchain Plc, a cryptocurrency miner based in the United Kingdom, has also announced a deal with Galaxy Digital Holdings to sell its flagship facility in order to fund operations and avoid bankruptcy