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Core Scientific pays off $38 million of outstanding debt with 27,000 mining rigs

 


In an agreement with New York Digital Investment Group (NYDIG), the mining company Core Scientific has agreed that the latter will forgive the miner's $38.6 million in unpaid debt in exchange for the miner paying the investment company 27,000 mining rigs that were given as payment.


In a recent court document, Core claims that the disputed mining rigs are no longer required for its own business. The Texas bankruptcy court that is in charge of approving the deal is therefore the one that both parties are currently awaiting permission from.


Even though the mining company anticipates that the decision will significantly hurt its sales, at least in the short term, Core Scientific cautions that the advantages of paying off the debt "outweigh the immediate loss. Accordingly, the miner is convinced that the agreement is a crucial step toward ensuring the success and sustainability of their own company.


According to the company, the operation will be changed to a "smaller but more efficient" fleet of mining rigs that were already present but not yet in operation. The S19 XP rigs ought to at least somewhat lessen the anticipated sales losses.


After the miner experienced financial difficulties for several months last year, the crypto company filed for Chapter 11 bankruptcy on December 21. In a formal annual report submitted at the time, Core informed the US Securities and Exchange Commission (SEC) that factors such as rising energy costs, an increase in Bitcoin hash rates, a drop in the value of the cryptocurrency, and the demise of cryptocurrency lender Celsius had all significantly contributed to its own predicament.


On Jan. 31. The mining company already received approval from the bankruptcy court to obtain a new $70 million loan in order to settle an old debt. The investment bank B will now be able to lend money to Core Scientific. Riley, which is currently owed money by the business.

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