What To Know: Following a comprehensive review of potential alternatives and "exhaustive discussions" with various shareholders, Core Scientific announced plans to enter into a restructuring support agreement with the Ad Hoc Noteholder Group, representing more than 50% of the holders of its convertible notes.
To implement the comprehensive restructuring transaction, the company said it filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
The stock is surging Thursday on reports the company has secured a $37.5 million loan to keep computers operating throughout the bankruptcy process. According to Bloomberg, the company has gained access to the capital via a debtor-in-possession loan provided by a group of creditors.
Core Scientific previously said it planned to continue mining Bitcoin (CRYPTO: BTC) under its existing self-mining and host operations. The company said its bankruptcy filing was necessitated by a decline in its operating performance, liquidity suffering from the prolonged decrease in the price of Bitcoin, an increase in electricity costs and the failure by certain of its hosting customers to honor their payment obligations.
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CORZ Price Action: Core Scientific shares are up 108.6% at 11 cents at time of publication, according to Benzinga Pro.
Photo: Johannes Blümel from Pixabay.