Financial services platform B Riley has offered a loan to keep Core Scientific, a Bitcoin miner, from going bankrupt.
Crypto Winter
In addition to the crypto market being in a bear market, Bitcoin Miners, which have been affected by the recent troubles and crises, are among those who have had the hardest this crypto winter. Core Scientific, a Bitcoin Miner, is among those affected. According to the company’s report to the United States Securities and Exchange Commission (SEC), it lost $435 million in the third quarter and $862 million in the second quarter. Thus, Core Scientific’s net loss is seen as 1,7 billion dollars from the beginning of the year to this time.
Bankruptcy is Not the Solution to Troubles
B Riley, one of Core Scientific’s largest lenders, has offered $72M in financing to a struggling Bitcoin Miner to avoid a potentially unnecessary and value-destroying bankruptcy lawsuit.
Stating that bankruptcy is not the solution to Core Scientific’s troubles, B Riley plans to provide non-cash pay financing on favorable terms with more than two years of runway for the firm to reach profitability.
B Riley’s Method
The offer made does not reduce B Riley’s debt to Core Scientific’s equipment lenders, but covers the suspension of all principal payouts to equipment lenders until the Bitcoin price reaches the $18,500 band. With the price coming back to the desired regions, it is planned that Core Scientific will gradually pay the equipment lenders until the principal and interest payments are paid out.
B Riley said: “Bankruptcy is not the answer and would be a disservice to the Company’s investors. It will destroy value for the Company’s shareholders, reduce potential recoveries for the Company’s lenders, deplete its limited resources and create massive uncertainty for all its shareholders.”
About B Riley
Riley Financial, Inc. provides diversified financial services. The company, investment banking, corporate finance, research, sales and trading, as well as consulting, valuation and asset management services. B. Riley Financial serves high net worth individuals and public and private companies worldwide.
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