But with the payment date fast approaching, there’s nevertheless some anxiety over what the impulsive billionaire might do to ease the social-media company’s US$12.5bil debt burden.
A group of seven banks, led by Morgan Stanley, own the debt. The drama around Musk’s acquisition and volatile markets left them saddled with the loans, which they normally would have offloaded to investors. While anything is possible with Musk, he doesn’t have many reasons to skip the first interest payment. The longer term is a bigger question: In the Twitter Spaces conversation, he said the company was on pace to lose US$3bil in 2023.But in the near term, if Twitter didn’t pay its interest, that could trigger a default, which would allow the banks to force the company into Chapter 11 bankruptcy.
“If you’re a lender to Twitter and Elon Musk is threatening to not pay the coupon, you go to the standard playbook, which is: ‘OK, I’ll see you in bankruptcy,’” said Philip Brendel, a distressed debt analyst at Bloomberg Intelligence.“Whether he cares whether he loses that or not, that’s a whole different question. He certainly behaves differently than what normal people would do in those situations.
Late last year, bankers were considering replacing some of the high-interest debt with new margin loans backed by Tesla Inc stock that he’d be personally responsible for repaying, one of several options considered at the time. There’s also a chance that Musk decides to give up on Twitter and refocus on his other companies including Tesla and SpaceX.
Malaysia Latest News, Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: malaymail - 🏆 1. / 86 Read more »
Source: malaymail - 🏆 1. / 86 Read more »
Source: staronline - 🏆 4. / 75 Read more »