Elon Musk’s $44B buy of Twitter (TWTR) was funded partly by $13B in debt and regardless of the takeover having solely closed in October, the first interest payment could be proper across the nook.
Citing three folks near the buyout, the first payment of the $1.5B in annual interest bills could be due on the finish of January, the Financial Times reported.
In December, Musk bought practically $3.6B value of Tesla (NASDAQ:TSLA) inventory partly to assist pay for the transaction. However, he vowed to not promote anymore for one more two years, whilst advertisers have left Twitter (TWTR) and the corporate’s weak monetary place have led to Musk shedding hundreds of workers and in search of new methods to generate income.
The FT famous that Musk has quite a lot of choices to assist make the interest payment, together with a painful chapter, promoting further fairness within the firm or utilizing money from Twitter’s (TWTR) steadiness sheet.
Musk could additionally look to restructure the debt used to purchase Twitter (TWTR), because the FT added Musk is in discussions with banks to switch the roughly $3B of unsecured debt yielding 11.75% with margin loans, utilizing his Tesla (TSLA) stake as collateral.
Musk’s debt is held by a number of banks, together with Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC), Barclays (NYSE:BCS) and Mitsubishi.
Earlier this month, Wedbush Securities analyst Dan Ives mentioned the sell-off in Tesla (TSLA) could proceed if Musk continues to be distracted by Twitter.