Bankrupt Core Scientific Owes BlackRock, Apollo, And Other Creditors $500M – Report
BlackRock Inc. and Apollo Global Management Inc. were reportedly among creditors who credited insolvent Core Scientific Inc. by buying its secured convertible notes worth about $500 million.
BlackRock And Other Lenders Lost $500 Million To Core Scientific
A court filing revealed that BlackRock and some other lending firms were caught in a loss matrix as bankrupt mining firm Core Scientific owed them a whopping $500M before it crashed. According to reports, the traditional lenders initially helped the mining firm to bankroll during its productive days.
They issued debt notes worth millions to support the booming BTC mining platform. However, the abrupt decline in BTC price, which dominated 2022, caused the firm to overspend on electricity.
In addition, Core Scientific miners who process mining transactions recorded a drastic drop in their profit margins. Consequently, the diminishing profitability and high energy cost forced Core Scientific to file for chapter 11 bankruptcy.
Furthermore, the report showed that in August 2022, BlackRock used its subsidiaries’ funds to purchase about $38 million worth of secured convertible notes from Core Scientific. Also, Apollo Capital Management made a double purchase of the products last year.
In April, it acquired $22.6 million of convertible notes. Later in August, it purchased $11 million of the same product. Apart from their purchases, the asset managers pooled together a debtor-in-possession credit to keep Core Scientific in operation while it faced bankruptcy.
According to the report, BlackRock contributed about $17 million, while Apollo remitted $6 million in loans to the troubled mining firm. Meanwhile, other large lender firms also purchased some convertible notes.
Ibex Investors lent Core Scientific about $98 million in April. In addition, the lender contributed about $10 million to help Core in its bankruptcy predicament.
This makes Ibex Investors the lender with the largest share of the notes amongst the creditors. Other lender firms that hold a portion of the convertible notes included MassMutual, ICG Advisors, and Gullane Capital.
Before its collapse, Core Scientific Inc. had the largest computing power making it the biggest BTC miner in the USA. However, it is the first mining firm that offers publicly traded crypto services to file for a Chapter 11 bankruptcy.
Besides the convertible notes it sold to creditors, Core used his computer facilities as collateral to obtain loans worth millions of dollars from several other crypto lenders.
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