Cryptocurrency mining hardware maker Bitmain and bankrupt crypto mining firm Core Scientific have agreed on a combination of equity and cash to finalize the deal on expanding 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 in August 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.
The expansion and investment plan by Bitmain will come into force by the fourth quarter of 2023, pending approval from a judge. Once approved, the hardware will potentially add 4.1 exahashes to Core Scientific’s hash rate. The two crypto mining companies have also agreed to work together to upgrade Bitmain’s last-generation miners hosted at Core Scientific’s data centers to further increase the firm’s productivity.
Core Scientific filed for Chapter 11 bankruptcy in December 2022, citing the financial crisis and the declining price of Bitcoin as the key reasons behind its decision. The firm started facing trouble in the weeks leading up to its eventual collapse due to market turmoil.