To settle the Twitter takeover account, Elon Musk put part of his personal assets on the table, supplemented by investment funds and other large fortunes, in addition to bank loans. Here are the financing details.
Initially, the Tesla boss only wanted to spend about $15 billion of his own money on the operation. A significant part of the package, $12.5 billion, would come from loans backed by his Tesla shares, which prevented him from selling them. But he finally decided to offer more cash and give up this loan. In two waves, in April and August, the red-hot 50-something sold about $15.5 billion worth of shares in the electric-car maker.
More than 5 billion dollars raised through investors
The native of Pretoria (South Africa), whose fortune Forbes magazine estimates at about 220,000 million dollars, will thus pay directly more than 27,000 million dollars. Note that he entered the capital at the beginning of the year and already controls 9.6% of Twitter after buying shares in the market. Added to this are some 5.2 billion dollars contributed by investment funds and large fortunes, in particular the co-founder of the Oracle software publisher, Larry Ellison, who wrote a check for one billion, or Qatar Holding, controlled by the sovereign wealth fund of Qatar, Qatar Investment Authority.
The cryptocurrency exchange Binance is also part of this list of investors with a contribution of 500 million dollars. “We are delighted to be able to help Elon realize a new vision for Twitter,” Binance CEO Changpeng Zhao said in a statement. In exchange for his investment, everyone will receive securities and become shareholders of Twitter. This group is completed by the Saudi prince Al-Walid ben Talal, who contributed to Elon Musk the almost 35 million shares that he already owned.
Societe Generale and BNP Paribas among credit institutions
The balance, or 13,000 million dollars, is provided by bank loans, released by a group of institutions including Morgan Stanley, Bank of America, the Japanese financial group Mitsubishi UFJ and Mizuho, Barclays and the French Société Générale and BNP Paribas. According to documents filed with the US Markets Authority, the SEC, Morgan Stanley alone lends about $3.5 billion.
These loans are backed by Twitter and it is the group, and not Elon Musk, who will bear the financial burden and payment. So far, the Californian company has struggled to generate profits and, in particular, has posted an operating loss (result directly related to activity) for the first six months of 2022. This debt will therefore put the platform under financial pressure.
Source: BFM TV
