Friday, June 2, 2023

Elon Musk Considers Raising Up To $3 Billion To Pay Off Twitter’s Debt

Elon Musk’s team has been exploring a new fundraiser of up to $3 billion to help pay off part of Twitter’s $13 billion debt from buying the company, sources familiar with Bloomberg have told Bloomberg. The issue.

In December, Musk’s representatives talked about selling up to $3 billion in new Twitter shares. In this sense, they explained that a successful capital increase could be used to pay off the debt that carries the highest interest rate within 13,000 million dollars.

The payment of the debt would mean financial relief for Twitter
and would allow you to keep advertisers on the platform. In November, Musk said that Twitter had suffered “a massive drop in revenue” and was losing more than $4 million a day.

Musk also went so far as to say that bankruptcy was a possibility for the company, although he later shared more optimistic views, noting that he expects cash flow to “more or less” break even in 2023, having cut about 6,000 jobs. .

For their part, the banks holding the $13 billion of debt have yet to receive any formal notice of any repayment.

Every quarter that passes without Twitter refinancing the debt, the interest rate rises an additional 0.5 percent, according to regulatory filings. Twitter’s first quarterly interest payment is due at the end of the month.

Twitter’s annual interest charge has risen by more than $100 million since it announced the acquisition last April, as the overnight interest rate has risen. At the time of the announcement, the overnight rate was 0.3 percent.

A potential deal would bring relief to the banks that backed Musk’s takeover of the social media company, and which intended to sell the debt to third-party investors, although tack was reversed after deteriorating market conditions.


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