- Bitmain will invest $53.9 million in the bankrupt Bitcoin mining company, Core Scientific.
- The agreement is a combination of equity and cash to finance the purchase of efficient Bitcoin mining equipment.
- Core Scientific’s CEO said the agreement would prepare them for Bitcoin’s upcoming halving event.
Bitmain, a prominent leading manufacturer of digital currency mining servers, announced that it will invest $53.9 million in the bankrupt Bitcoin mining company, Core Scientific.
The two companies have agreed on a combination of equity and cash to finance the purchase of efficient Bitcoin mining equipment. Bitmain plans to supply Core Scientific with 27,000 Bitmain S19J XP 151 TH servers in exchange for $23.1 million in cash and $53.9 million in Core Scientific stock. In this context, Bitmain CEO Max Hua said,
We look forward to deepening our strategic relationship with Core Scientific, our long-standing U.S.-based partner. Their professionalism, integrity, and commitment to the success of their hosting customers and the growth of the Bitcoin network are unsurpassed in the industry.
The share value of Core Scientific’s common stock would be determined in accordance with a bankruptcy court-approved Chapter 11 plan of reorganization. According to the report, approval is expected during the fourth quarter of this year.
Adam Sullivan, CEO of Core Scientific, shared his joy over the partnership. “We are honored to expand our significant relationships with Bitmain. Together, we have worked tirelessly to professionalize our industry, charting a path for the long-term growth of the Bitcoin network as Bitcoin adoption increases around the world.”
Sullivan shared that the new miners that they would be securing with their agreement with Bitmain would enhance their mining fleet’s efficiency and prepare them for Bitcoin’s next year halving event.
Coin Scientific filed for bankruptcy in December 2022. At that time, the company was generating positive cash flow but stated that it wasn’t enough to pay back its debt. In March 2023, Core Scientific received the bankruptcy court’s approval to borrow $70 million to fund its operations, which led to a 7% increase in the company’s stock price.
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