• Core Scientific has agreed to hand over 27,403 of its mining machines to NYDIG to pay off a debt of $38.6 million.
• The agreement needs to be approved by the relevant magistrates before becoming official.
• The company borrowed $77.5 million from the investment firm in 2020, but stopped settling its debt towards the end of 2022 due to shrinking revenue caused by the bear market.
Core Scientific Agrees to Hand Over Mining Rigs
Core Scientific has come to an agreement with the New York Digital Investment Group (NYDIG) wherein it will hand over 27,403 of its mining machines in order to pay off a debt of $38.6 million. This agreement still needs approval from relevant magistrates before it can become official.
How Did Core Scientific Accumulate Its Debt?
In 2020, Core Scientific borrowed $77.5 million from an investment management firm in order expand its business operations; however, towards the end of 2022, it was unable to settle this debt due to decreasing revenue caused by a bear market and increasing energy costs. Net losses for Core Scientific reached $1.7 billion by Q3 2022 and as a result, they were forced into filing for Chapter 11 bankruptcy protection shortly before Christmas that year.
What Is Included In The Agreement?
Under this agreement, Core Scientific will transfer 27,000 of its mining rigs (which are no longer vital for their business) back to NYDIG in order eliminate their debt completely. However, until this deal is approved by relevant magistrates, it cannot become official yet and remains just an agreement between both parties involved at present time.
Implications Of This Deal
If this deal does get approved then not only would Core Scientific have paid off all its debts but also have more room for maneuvering within their business operations due lesser financial obligations and liabilities on their part which would ultimately help them bounce back from bankruptcy more easily than expected earlier on..
The deal between Core Scientists and NYDIG is still pending approval from relevant magistrates; however if it does go through then both parties could reap significant benefits from it that could help them move forward in a much better position than they were previously standing at prior to entering into this agreement with one another