Twitter paid off the first instalment of its debt this month, according to Bloomberg. Elon Musk borrowed $12.5 billion from banks including Morgan Stanley to take the social-media company private in October. Repaying the first instalment is a sign that Twitter won’t have to file for bankruptcy. Loading Something is loading.
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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 a Bloomberg report published Monday that cited people familiar with 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 costly 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, 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 the Financial Times.
If 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.
“We have an emergency fire drill on our hands,” Musk told a Twitter Spaces forum last month.
“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.”
Read more: Elon Musk has to make the first interest payment on the $13 billion debt he took on to buy Twitter – and the company’s dire financial situation means it faces risks including bankruptcy