FT: Elon Musk’s creditors do not count on a quick return of funds
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The banks that loaned Elon Musk $12.7 billion to buy Twitter do not expect to be able to quickly return their funds, writes Financial Times citing own sources.
According to the publication, creditors are preparing to keep debts on their balance sheets, at least until the spring of 2023. At the same time, banks have already come to terms with the fact that they may not be able to sell Mr. Musk’s debt obligations for many months, and the loans themselves will eventually result in serious financial losses for banks.
Banks are waiting for Elon Musk to present a clear Twitter strategy for the coming years, including his vision of how the social network will cut costs and increase profits, sources say. Until then, it will be extremely difficult for investors to sell Mr. Musk’s debt obligations, seven creditor banks participating in the deal believe at once.
The newspaper notes that banks, including Morgan Stanley, Bank of America, Barclays and BNP Paribas, did not try to sell Elon Musk’s debt to institutional investors before the completion of the transaction, as creditors often do, since the purchase itself was in limbo for several months from – for disagreements between Mr. Musk and Twitter over the terms of the agreement.
Elon Musk closed the deal to buy Twitter on October 27th. The amount of the transaction is $ 44 billion. In a few days, Mr. Musk managed to announce about plans to recover accounts that have been suspended for dubious or minor reasons, and create a council content moderation, as well as the intention revise the process of verifying accounts in the service. Also, Elon Musk dissolved board of directors of the company, temporarily becoming the sole head of Twitter.
Read more about the deal – in the material “Elon Musk took over Twitter”.
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