Key Points
- Bitcoin mining company Core Scientific plans to raise $400 million through a private offering of convertible senior notes.
- The funds raised will be used to repay outstanding loans and support general corporate activities, including potential acquisitions.
Core Scientific, a prominent miner of Bitcoin, is planning to raise $400 million by issuing convertible notes that will be due in 2029. The goal of this fundraising effort is to fully repay any outstanding loans.
The company’s shares saw a significant drop of 10% on August 14, following the announcement of this plan. The funds will be raised through a private offering of convertible senior notes.
Fundraising Details and Use of Proceeds
The press release issued on August 14 stated that the new capital will be obtained from qualified institutional buyers as per Rule 144A of the Securities Act. The funds will be used to clear outstanding loans and to support general corporate activities, which may include potential acquisitions.
The notes will carry an interest rate of 3.00% and are set to mature in 2029. The issuance is scheduled for August 19, subject to standard closing conditions.
The company anticipates net proceeds of $386.6 million, or $445 million if the option is fully exercised. More than $61 million will be allocated to repay loans under its January credit agreement and $150 million to redeem senior secured notes due in 2028. The remaining funds will be used for working capital and other corporate needs.
Company’s Recent Activities and Future Plans
This move comes after Core Scientific’s recent announcement to modify a significant portion of its infrastructure to support high-performance computing services. The company reported producing only 411 Bitcoin in July, a 4.4% decrease from June, and stated that it had sold 97% of its July Bitcoin production to cover operational costs.
The company has faced challenges since its bankruptcy declaration in 2022, triggered by the FTX collapse. This led to a temporary suspension of its shares on the Nasdaq under the ticker CORZ, but trading resumed after the company successfully avoided closure.
Despite these financial challenges, Core Scientific continues to operate 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.
