Benzinga - Core Scientific Inc (NASDAQ: CORZ) shares are trading lower Wednesday after the company filed for Chapter 11 bankruptcy.
What Happened: Following a comprehensive review of potential alternatives and "exhaustive discussions" with various shareholders, the company expects to enter into a restructuring support agreement with the Ad Hoc Noteholder Group, representing more than 50% of the holders of its convertible notes.
To implement the comprehensive restructuring transaction, Core Scientific said it filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The company plans to "move swiftly" through the restructuring process.
Core Scientific also said it will continue to mine Bitcoin (CRYPTO: BTC) under its existing self-mining and host operations, which are cash flow positive.
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The company noted the bankruptcy filing was necessitated by a decline in its operating performance, liquidity suffering from the prolonged decrease in the price of Bitcoin, an increase in electricity costs and the failure by certain of its hosting customers to honor their payment obligations.
Core Scientific is a blockchain computing data center provider and miner of digital assets in North America. The company focuses on proof-of-work cryptocurrencies like Bitcoin.
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CORZ Price Action: Core Scientific shares are down 25.6% at 16 cents at time of publication, according to Benzinga Pro.
Photo: Mohamed Hassan from Flickr.
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