Core Scientific seeks raising $400m to repay outstanding loans

Bitcoin miner Core Scientific is offering $400 million in convertible notes due 2029 to repay in full the outstanding loans.

The shares of Bitcoin miner Core Scientific (CORZ) plunged as much as 10% on Aug. 14, after the company announced plans to raise $400 million through a private offering of convertible senior notes.

In an Aug. 14 press release, the crypto mining firm said the fresh capital, set to be secured 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 notes, bearing a 3.00% interest rate, will mature in 2029, with the issuance scheduled for Aug. 19, subject to customary closing conditions, the press release reads.

Core Scientific targets debt and upgrades with proceeds

The firm estimates net proceeds of $386.6 million, or $445 million if the option is fully exercised. Core Scientific plans to allocate over $61 million to repay loans under its January credit agreement and $150 million to redeem senior secured notes due in 2028. The remaining funds will go toward working capital and other corporate needs, per the press release.

This move follows Core Scientific’s recent announcement to modify a significant portion of its infrastructure to support high-performance computing services. The firm also reported producing only 411 (BTC) in July, a 4.4% decrease from June, and revealed it had sold 97% of its July Bitcoin production to cover operational costs.

Emerging from bankruptcy

Core Scientific has been navigating rough waters since its bankruptcy declaration in 2022, triggered by the FTX collapse. This turmoil led to a temporary suspension of its shares on the Nasdaq under the ticker CORZ, though trading resumed after the company successfully avoided closure.

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