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Bitcoin mining rig maker Bitmain plans to invest $54 million in bankrupt Core Scientific

source-logo  theblock.co 22 September 2023 06:05, UTC

Crypto mining rig manufacturer Bitmain plans to invest $53.9 million in bitcoin mining firm Core Scientific, the miner announced today.

The Texas-based bitcoin miner said in a statement that the investment from Bitmain comes as the two firms aim to expand their “longstanding relationship” as part of a supply contract. Both firms have agreed on a combination of equity and cash to finance the purchase of new bitcoin mining machines.

Under the purchase agreement, Bitmain plans to supply Core Scientific — which filed for Chapter 11 bankruptcy protection in December — with 27,000 bitcoin mining servers in exchange for $23.1 million in cash and $53.9 million in Core Scientific common stock, according to the statement.

A bankruptcy court will determine the company's stock value per share in accordance with the Chapter 11 reorganization plan, the approval of which is expected in the fourth quarter of this year, Core Scientific said.

Bitmain has also signed a new hosting agreement with Core Scientific, the company said.

“[Core Scientific’s] professionalism, integrity, and commitment to the success of their hosting customers and to the growth of the Bitcoin Network is unsurpassed in the industry,” Max Hua, chief executive officer of Bitmain, said in the statement.

Plans to increase computing power

Core Scientific said it plans to receive and energize the 27,000 new units in the fourth quarter of this year, which is expected to add potential computing power of 4.1 exahashes to its self-mining hash rate.

As of the end of August, Core Scientific operated about 206,000 bitcoin mining rigs for both hosting and self-mining, amounting to a total hash rate of 22 exahashes per second at its U.S. facilities. It said it produced 965 bitcoin in August in self-mining and 9,755 bitcoin during the first eight months of this year, “more than any other listed bitcoin miner in North America.”