Core to Raise $55 Million in Equity Amid Chapter 11 Exit

Core Scientific has started an equity rights offering to raise $55 million as part of its Chapter 11 reorganization plan.

The company filed the latest reorganization plan last week with a detailed timetable and received “conditional” approval from the court on Friday. Core’s plan hinges on a reorganized enterprise valuation of $1.5 billion.

Following the court approval, Core Scientific said on Monday it has started the equity rights offering, presenting existing common stockholders the right to acquire additional stocks at an anticipated price of $8.2171 per share.

In the event the equity rights offering falls short of raising more than $37.1 million, Core said it has secured a commitment from undisclosed parties willing to purchase up to $37.1 million.

As part of the reorganization plan, Core Scientific filed a registration statement on Friday with the Securities and Exchange Commission to issue two tranches of new convertible notes to existing holders of convertible notes secured claims.

The first tranche encompasses an aggregate principal amount of up to $260 million, bearing a 10% interest rate or 12% cash interest along with equity payments, maturing in 2029. The second tranche amounts to $150 million with an interest rate of 12.5%, due in 2028.

Based on the previous restructuring agreement, the first interest payments for the two convertible notes will be due in June 2024, just months after the next bitcoin halving.

According to Core’s court filings, claim holders will have until Dec. 13 to vote on the reorganization plan and a combined hearing for the final approval of the plan is scheduled for Dec. 22.