- Twitter paid off the primary instalment of its debt this month, in accordance with Bloomberg.
- Elon Musk borrowed $12.5 billion from banks including Morgan Stanley to take the social-media company private in October.
- Repaying the primary instalment is an indication that Twitter won’t must file for bankruptcy.
Twitter has reportedly made its first interest repayment on the huge debt that Elon Musk took on in his takeover last yr – meaning it’ll find a way to stave off bankruptcy for now.
The social media company paid off the primary instalment of the $12.5 billion debt this month to the seven banks that financed the deal, in accordance with a Bloomberg report published Monday that cited people conversant in the matter.
The coupon was expected to cost Twitter around $300 million, the publication said, and was due on January 27 – three months after Musk concluded his chaotic and dear takeover.
Musk bought Twitter for $44 billion in October, borrowing $12.5 billion from banks including Morgan Stanley, Bank of America, and Barclays.
The debt is held by Twitter, somewhat than Musk personally – and the corporate is required to pay back around $1.5 billion a yr in interest payments, in accordance with a previous report by the Financial Times.
If Twitter had did not make the primary interest payment, its management could have chosen to explore filing for bankruptcy as a part of a debt restructuring process.
Musk has repeatedly sounded the alarm in regards to the social media giant’s funds and floated the opportunity of filing for bankruptcy to restructure its debt.
The world’s second-richest man has scrambled to chop costs at Twitter since he accomplished his takeover in October, shedding around 50% of employees and launching a brand new subscription service called Twitter Blue.
“Now we have an emergency fire drill on our hands,” Musk told a Twitter Spaces forum last month.
“This company is such as you’re in a plane that’s headed towards the bottom at high speed with the engines on fire and the controls don’t work,” he added. “That is the rationale for my actions that could appear sometimes spurious.”
Read more: Elon Musk has to make the primary interest payment on the $13 billion debt he took on to purchase Twitter – and the corporate’s dire financial situation means it faces risks including bankruptcy