Core Scientific finalizes $77 million agreement with Bitmain for 27,000 Bitcoin mining machines.

Bitmain, a manufacturer of cryptocurrency mining hardware, and Core Scientific, a crypto mining company currently in bankruptcy, have reached an agreement involving a mix of equity and cash to complete the expansion of mining facilities.

This arrangement will see Bitmain provide 27,000 Bitcoin (BTC) mining rigs for $23 million in cash, in addition to $53.9 million in common stock from the bankrupt entity. Besides the hardware acquisition, Bitmain and Core Scientific have established a new hosting agreement to support Bitmain’s mining activities.

The agreement was finalized in August, following a court filing that outlined Bitmain’s intention to exchange mining equipment for cash and equity as part of Core Scientific’s restructuring strategy. In addition to Bitmain, the restructuring plan also involved Anchorage, BlockFi, and Mass Mutual Asset Finance. All three firms, excluding Anchorage, opted for a combination of cash and equity to resolve their claims.

Related: Core Scientific appoints Adam Sullivan as CEO amid restructuring process

Bitmain’s expansion and investment initiative is set to take effect in the fourth quarter of 2023, subject to judicial approval. Once sanctioned, the hardware is expected to contribute an additional 4.1 exahashes to Core Scientific’s hash rate. The two mining companies have also committed to collaborating on upgrading Bitmain’s previous-generation miners located at Core Scientific’s data centers to enhance the firm’s efficiency.

Core Scientific filed for Chapter 11 bankruptcy in December 2022, citing the financial downturn and the falling price of Bitcoin as primary factors for its decision. The company began encountering difficulties in the weeks leading up to its eventual downfall due to market instability.

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