• Core Scientific is receiving $72 million in a loan from lender B Riley, to provide two years of runway before the miner anticipates profitability.
• Core Scientific has faced various headwinds in recent months, such as halting debt service payments, selling Bitcoin, and cash resources running low.
• B Riley believes bankruptcy is not necessary and that the miner’s previous debts were due to an aggressive and ill-conceived strategy.
Core Scientific, a publicly traded miner, is receiving a lifeline in the form of a $72 million loan from their lender, B Riley. This loan comes on favorable terms, with the intention of providing two years of runway before the miner anticipates profitability. Core Scientific has recently seen a number of obstacles, ranging from halting debt service payments, to selling Bitcoin, to cash resources running low. Furthermore, a lawsuit has been filed against the miner by Kirby McInerne LLP on behalf of Core Scientific investors. Despite this, B Riley believes bankruptcy is not necessary and attributes the miner’s previous debts to an aggressive and ill-conceived strategy.
The lender explained that Core Scientific took out loans when the price of Bitcoin was significantly higher than it is now and the theoretical payoff on miners was significantly faster. This decision to never sell Bitcoin on hand and never hedge prices, combined with the fast maturity associated with mining, has led the miner to their current position. B Riley further believes that there is a path forward and have been proactive in working through a solution, specifically by providing debt on a number of unencumbered assets.
The $72 million loan has the potential to provide much-needed support for Core Scientific. The loan will offer a longer runway, allowing the miner to more effectively adjust to the current market and plan for the future. B Riley is confident in its decision to provide the loan, and Core Scientific is hopeful that this will be their saving grace.