Cryptocurrency mining hardware maker Bitmain and bankrupt crytpto mining firm Core Scientific have agreed on a combination of equity and cash to finalize the deal on the expansion of mining facilities.
The deal between the two mining companies will see Bitmain supply 27,000 Bitcoin (BTC) mining rigs for $23 million in cash along with $53.9 million worth of common stock of the bankrupt firm. Apart from the mining hardware purchase deal, Bitmain and Core Scientific have signed a new hosting arrangement to assist Bitmain’s mining operations.
The deal was finalized earlier last month when a court filing highlighted Bitmain’s plan to sell mining hardware in exchange for cash and equity as part of Core Scientific’s restructuring plan. Apart from Bitmain, the restructuring plan also included Anchorage, BlockFi and Mass Mutual Asset Finance. Apart from Anchorage, all other three firms chose a mix of cash and equity options to settle their claims.
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The expansion and investment plan by Bitmain will come into force by the fourth quarter of this year pending approval from a judge slated for the final quarter. Once approved, the added hardware will potentially add 4.1 exahashes to Core Scinfitic’s hash rate. The two crypto mining focused companies have also agreed to work together to upgrade Bitmain’s last-generation miners hosted at Core Scientific’s data centres to increase the firm’s productivity further.
Core Scientific filed for Chapter 11 bankruptcy in December 2022, citing the financial crisis and declining price of Bitcoin as the key reasons behind their decision. The firm started facing trouble in the weeks leading upto its eventual collapse in December owing to the market turmoil.
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