Twitter just made its first interest payment on Elon Musk's massive buyout debt – so it will avoid bankruptcy for now
Twitter has reportedly made its first interest repayment on the massive debt that Elon Musk took on in his takeover last year – meaning it'll be able to stave off bankruptcy for now.
The social media company paid off the first instalment of the $12.5 million debt this month to the seven banks that financed the deal, according to aThe coupon was expected to cost Twitter around $300 million, the publication said, and was due on January 27 – three months afterMusk 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, rather than Musk personally – and the company is required to pay back around $1.5 billion a year in interest payments, according to a previous report by theIf Twitter had failed to make the first interest payment, its management could have chosen to explore filing for bankruptcy as part of a debt restructuring process.
Musk has repeatedly sounded the alarm about the social media giant's finances and floated the possibility of filing for bankruptcy to restructure its debt. The world's second-richest man has scrambled to cut costs at Twitter since he completed his takeover in October, laying off around 50% of employees and launching a new subscription service called Twitter Blue."This company is like you're in a plane that is headed towards the ground at high speed with the engines on fire and the controls don't work," he added."That's the reason for my actions that may seem sometimes spurious.
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