Core Scientific seeks raising $400m to repay outstanding loans

Bitcoin mining company Core Scientific is offering $400 million worth of convertible notes due 2029 to pay off all outstanding loans.

Shares of bitcoin mining company Core Scientific (CORZ) fell as much as 10% on Aug. 14 after the company announced plans to raise $400 million through a private offering of convertible senior notes.

The new capital, which will be raised from qualified institutional buyers under Rule 144A of the Securities Act, will be used to repay outstanding loans and support general corporate activities, including potential acquisitions, the crypto mining firm said in an Aug. 14 press release.

The bonds, which have an interest rate of 3.00%, will mature in 2029 and the issuance will take place on August 19, subject to ordinary closing conditions, the press release said.

Core Scientific targets debt and upgrades with proceeds

The company projects net proceeds of $386.6 million, or $445 million if the option is exercised in full. Core Scientific plans to set aside more than $61 million to repay loans under the January credit agreement and $150 million to repay senior secured notes due in 2028. The remaining funds will go toward working capital and other corporate needs, according to the press release.

The move comes after Core Scientific’s recent announcement to shift a significant portion of its infrastructure to support high-performance computing services. The company also reported that it produced only 411 (BTC) in July, a 4.4% decrease from June, and disclosed that it sold 97% of its Bitcoin production in July to cover operational costs.

Emerging from bankruptcy

Core Scientific has been navigating rough waters since its bankruptcy filing in 2022, triggered by the FTX crash. That turmoil led to the company’s shares being temporarily suspended on the Nasdaq under the ticker CORZ, but trading has resumed after the company successfully avoided closure.

Despite its financial difficulties, Core Scientific maintains a robust fleet of ASIC rigs. As of the end of July, the company operated 214,000 Bitcoin miners with a combined hashrate of 25.3 EH/s distributed across seven data centers in Georgia, Kentucky, North Carolina, North Dakota, and Texas. Core Scientific plans to double its production efforts by increasing mining capacity by over 50% by 2028.