: Core Scientific Secures $72M Loan From B Riley to Stay Afloat
• Core Scientific has secured a new loan from B Riley totaling $72 million which will provide two years of runway before the miner anticipates profitability.
• Core Scientific has faced a number of headwinds in recent months including halting debt service payments and selling off bitcoins.
• B Riley believes that bankruptcy is not necessary and that the miner’s previous loans were part of an aggressive, ill-conceived strategy.
Core Scientific, a publicly traded miner, has recently secured a loan from B Riley totaling $72 million. This new loan comes in addition to an existing loan with B Riley totaling $42 million. Both loans are intended to be “on favorable terms,” and the $72 million loan is expected to provide the miner with two years of runway before profitability is anticipated.
The miner has faced a number of headwinds in recent months, including halting debt service payments and the sale of 1,027 bitcoins over the last month. Furthermore, last week, a lawsuit was filed by Kirby McInerne LLP on behalf of Core Scientific investors. Despite this, B Riley believes that bankruptcy is not necessary and believes the miner’s previous loans were part of an aggressive, ill-conceived strategy.
In a statement released by the lender, B Riley explained that “We believe 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 statement further describes how the miner’s previous loans were made when the price of Bitcoin was significantly higher and the theoretical payoff on miners was significantly faster. This decision combined with the fast maturity associated with mining has led the Company to its current position.
Core Scientific is now facing an uncertain future, and it remains to be seen if this new loan will be enough to help the miner stay afloat. With the loan providing two years of runway, the miner will have time to assess their options and determine the best path forward. In the meantime, B Riley’s commitment to helping the miner secure favorable terms for their loan is a positive sign for the miner’s future.