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Elon Musk plans to raise over $2.5 billion to pay off Twitter debt

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Elon Musk owner on Twitter/AFP.

Elon Musk owner on Twitter/AFP.

Elon Musk’s team is considering raising up to $3 billion in new funding to pay off some of its $13 billion debt from its Twitter acquisition, a source familiar with the matter told Bloomberg. Told.

In December, Musk’s representatives talked about selling up to $3 billion in new Twitter stock. explained.

By paying off the debt, Twitter will be financially bailed out and keep advertisers on the platform. In November, Musk said Twitter had suffered a “significant drop in revenue” and was losing more than $4 million a day.

Musk also went so far as to say the company could go bankrupt, but later shared a more optimistic outlook, expecting cash flow to be “more or less” break-even in 2023, with about It said it was cutting 6,000 positions. .

The bank, which owes $13 billion, has yet to receive formal notice of its repayment.

Interest rates will rise another 0.5% each quarter Twitter does not refinance its debt, according to regulatory filings. Twitter’s first quarterly interest payment is due at the end of the month.

Twitter’s annual interest rate has increased by more than $100 million since the company announced the acquisition last April as overnight interest rates rose. At the time of the announcement, the overnight rate was 0.3% for him.

A potential deal would help Musk acquire a social media company and bring relief to a bank that had intended to sell debt to third-party investors.

Source: Diario.Elmundo

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