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Twitter to pay $300 million next week to repay Elon Musk deal.
At the end of October, Elon Musk became the nominal owner of Twitter, but the funds belonging to him and other investors did not fully cover the value of the social network's assets, so the company had to take out a $12.5 billion loan at a rather high interest rate. Next week, she has to make the first payment in the amount of $ 300 million to repay the loan.
In December, Elon Musk confirmed that Twitter has about $1 billion in accounts, so even with these considerations, the company has enough funds for the first payment on the loan. A group of creditors led by Morgan Stanley has every reason to receive the first payment in the amount of $300 million next Friday, January 27th. Without knowing the terms of the loan agreement with Twitter, it is difficult to assess whether there is a 30-day grace period for payment, if there are good reasons for this.
According to indirect data, Elon Musk personally owns about 79% of Twitter assets now, he spent more than $20 billion on their purchase last year, but their current value is unlikely to exceed $11.6 billion. In other words, if the billionaire risks contacting bankruptcy proceedings, it will lose a significant amount. His current net worth is estimated at $137.4 billion overall. It's not in Musk's interests to drive Twitter into bankruptcy, and he's tried to prove through his actions in recent weeks that he's trying to avoid it.
Last month, Musk sold $3.6 billion worth of Tesla shares, admitting that the money might be needed to support Twitter. It is difficult to say whether he will use at least part of this amount to buy back Twitter's debt obligations in order to reduce the interest rate. Lenders are not interested in such a deal as they forfeited $4 billion in profits due to the debt market crisis, which prevented them from reselling Twitter's liabilities to other investors. The company also has access to a $500 million revolving line of credit that it can use to cover shortfalls, including repayments to creditors.
Insider this week said that Twitter will soon cut up to 50 more employees in the product division, although at the end of last year, Elon Musk announced his readiness to refrain from further staff cuts. With new potential layoffs, the social network's headcount could drop below 2,000.