Bitmain and Core Scientific in $76.9 Million Deal to Boost Bitcoin Mining Operations
Summary:
Cryptocurrency hardware producer Bitmain has agreed to supply bankrupt mining firm Core Scientific 27,000 Bitcoin mining rigs in a deal worth $23 million cash and $53.9 million in common stock. Additionally, Bitmain and Core Scientific have signed a new hosting arrangement to support Bitmain's operations. This comes as part of Core Scientific's restructuring plan, which could also see the inclusion of Anchorage, BlockFi and Mass Mutual Asset Finance. The introduced hardware, pending judicial approval, is expected to increase Core Scientific's hash rate by 4.1 exahashes.
Cryptocurrency equipment producer Bitmain and insolvent crypto mining enterprise Core Scientific have reached an agreement of stock and cash to conclude the negotiation regarding expanding mining infrastructures. The agreement specifies that Bitmain will provide 27,000 Bitcoin (BTC) mining rigs to Core Scientific for a sum of $23 million in cash and $53.9 million in common stock from the defaulted company. In addition to the deal regarding machinery acquisition, Bitmain and Core Scientific have established a new accommodation agreement to support Bitmain's mining operations. The agreement was reached last month, with court documents revealing Bitmain's scheme to trade mining machinery for cash and equity as an aspect of Core Scientific's restructuring strategy. Bitmain isn't the only entity in the plan, which also includes Anchorage, BlockFi and Mass Mutual Asset Finance. Except for Anchorage, the remaining three companies selected a blend of cash and equity to resolve their dues. In connection to the restructuring process, Core Scientific named Adam Sullivan as new CEO. The expansion strategy proposed by Bitmain is expected to be implemented in the last quarter of this year, given the judge's approval. Once ratified, the additional hardware is projected to increase Core Scientific's hash rate by 4.1 exahashes. The two companies committed to cooperating on improving the prior generation of miners located at Core Scientific's data centres, with the aim to enhance the company's output. Citing economic downturn and Bitcoin's plummeting value as primary causes, Core Scientific filed for Chapter 11 bankruptcy in December 2022. Prior to the company's downfall in December, signs of turmoil in the market already signaled trouble.
Published At
9/22/2023 10:36:09 AM
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