Bankrupt Bitcoin (BTC) mining company Core Scientific filed an urgent motion to sell $6.6 million worth of Bitmain coupons on Jan. 25, court records show.
According to the filing, some conditions applied to the coupons make them useless for Core Scientific’s business. Specifically, the vouchers “can only be used to pay for 30% of any new Bitmain S19 Miners order, and cannot be redeemed with Bitmain for cash.”
The coupons are limited to S19 models only, which provide a lower hash rate compared to recent Bitmain models. “Debtors do not believe that using their liquidity to purchase new S19 miners, even with the availability of such coupons, is the best use of debtors’ cash,” the company stated.
Furthermore, Bitmain’s coupons expire between March and April 2023, when the company expects to be out of its reorganization under Chapter 11 of the US Bankruptcy Law. Core Scientific also noted that it will not acquire any more S19 miners while it is under bankruptcy protection or afterward.
Along with the motion, the firm has held discussions with Bitmain and two potential third parties interested in purchasing the coupons at a significant discount. Specifically, the sale of USD 1.9 million in Bitmain coupons for USD 285,000 and the sale of USD 4.8 million in coupons for approximately USD 713,000, both representing 15% of the face value of the coupons.
The sale would bring a total of nearly $1 million to Core Scientific’s balance sheet. The company also noted:
“While the aggregate purchase price of approximately $1 million would represent a significant discount to the approximately $6.7 million face value of the Bitmain Vouchers, it would also represent significant value above what these Bitmain Vouchers are worth to debtors and their assets: zero”.
According to the presentation, the bear market caused a rush of sales of S19 miners on the secondary market, driving prices down. “As such, recent S19 miners coupon transactions on the Coupon Exchange have occurred at values between 15% and 25% of the coupon’s face value.”
Core Scientific, one of the largest cryptocurrency mining companies in the United States, filed for Chapter 11 bankruptcy on December 21 due to rising energy costs, declining revenues, and falling energy prices. Bitcoin. Amid liquidity problems, the company recently obtained court approval to access a $37.5 million loan from existing creditors.
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