Core Scientific (CORZ), one of the world’s biggest Bitcoin (BTC) mining firms, has struck a deal on a $70 million loan from investment bank B Riley.
The company said in its filing it would request the loan from bankruptcy courts in Houston, Texas as part of its financing plan outlined in December.
Receiving the funds will allow the troubled firm to pay off its debtor-in-possession (DIP) offices, providing the firm up to 15 months of additional time.
It will also use the funds to replace its current facility and maintain its operations amid a massive bankruptcy, reports showed on Tuesday.
According to Core Scientific, the new loan conditions were “reasonable and generally superior” to its DIP facility terms. A hearing is set to take place on 1 February, the document revealed.
“The Replacement DIP Facility lays the foundation on which the debtors will seek to negotiate a consensual Chapter 11 plan with all of their key constituents and maximize value for all stakeholders,” it added.
Crypto Crisis Contagion Spreads
The news comes after last year’s cryptocurrency bear market sent markets reeling due to the collapse of disgraced crypto exchange FTX. The crisis triggered further issues with Core Scientific’s operations due to plummeting cryptocurrency prices and rising gas and electricity fees.
Prior to the collapse, the company held 10 percent of computing shares on Bitcoin’s network. To date, it owes up to 5,000 creditors and faces liabilities from $1 billion USD to $10 billion USD.
Core Scientific continued its operations despite filing for Chapter 11 bankruptcy, financing its operations by selling over 6,900 BTC. Additional firms such as Genesis, Voyager, and Three Arrows Capital (3AC) also failed due to ongoing crises in the crypto market.
