Core Scientific Repays $267M in Debt, Strengthens with $172.8M Cash Infusion

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Hassan Shittu

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Hassan Shittu

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August 21, 2024

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Core Scientific announced on Wednesday that it has taken steps to strengthen its financial position and fuel future growth.

The company repaid $267 million in debt, dramatically reducing its interest burden from approximately 12.5% to 3%. This move also secured a $172.8 million cash infusion.

These actions, according to the company, will provide Core Scientific with greater flexibility to expand its HPC hosting and Bitcoin mining operations, ultimately driving sustained growth.

Core Scientific Restructures Debt, Secures $172.8 Million

Core Scientific utilized proceeds from its convertible senior notes offering, announced on August 13, 2024, and closed on August 19, 2024, to repay a substantial $267 million in debt.

This refinancing significantly reduced Core Scientific’s interest burden and provided greater flexibility to pursue strategic growth initiatives. The restructuring process resulted in $172.8 million in net proceeds for the company.

After covering related expenses, these funds boosted Core Scientific’s cash reserves, providing ample resources for site acquisitions and further expansion of its HPC hosting capacity.

In a statement on the company’s latest strategic move, CEO Adam Sullivan said, “Our recent convertible note issue is a significant step in our commitment to strengthen our balance sheet and position Core Scientific for future growth.”

Growth Plans Amid Market Volatility

Core Scientific is focused on expanding its HPC hosting capacity to meet the growing demand for high-performance computing services.

The company operates eight data centers across the United States, with facilities in Georgia, Kentucky, North Carolina, North Dakota, and Texas.

These data centers are central to Core Scientific’s business model, which combines Bitcoin self-mining with hosting services for third-party customers.

While the majority of the company’s revenue currently comes from its self-mining activities, this requires ongoing investment in its mining infrastructure.

To further enhance its mining capabilities, Core Scientific recently partnered with Block, Inc.

This collaboration will see Block supply Core Scientific with its newly developed 3-nanometer ASICs, which is expected to increase Core Scientific’s mining capacity by approximately 15 EH/s, setting a new industry benchmark.

Core Scientific is also actively expanding its HPC infrastructure through a partnership with CoreWeave. On August 6, the company announced the expansion of this partnership, adding an additional 112 megawatts (MW) of capacity, bringing the total to 382 MW.

This expansion is projected to generate an additional $2.0 billion in revenue over the 12-year contract term, boosting total expected revenue from CoreWeave’s contracts to $6.7 billion.

With this expanded contract, Core Scientific now manages 1.2 gigawatts of contracted power and can provide nearly 500 MW of HPC hosting infrastructure.

Despite the company’s growth plans, Core Scientific recognizes that the cryptocurrency sector is subject to considerable uncertainty, including market fluctuations, interest rate changes, and potential regulatory hurdles.

The company has cautioned that these factors could impact its future performance.