Acquiring Twitter could personally cost Elon Musk $1 billion in interest a year

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Acquiring Twitter could personally cost Elon Musk $1 billion in interest a year
22 Apr 2022
7 min read

News Synopsis

On Thursday, Elon Musk's proposed bid to acquire Twitter got a lot more serious, and if it is inked the deal could cost Tesla’s CEO about $1 billion in annual interest payments. In a filing made with the SEC on Thursday, World’s Richest man disclosed that he has received several commitment letters from banks to fund his proposed acquisition of Twitter. Eventually, it turns out, taking on billions of dollars in debt costs a lot in annual interest payments. While SpaceX's CEO aims to fund nearly half of the deal with his own cash, he also plans to utilize a mix of debt and lines of credit to raise the capital necessary to purchase every outstanding Twitter share he doesn't own for $54.20 per share.

As per the filing, Elon Musk has received a letter of commitment from banks that have offered to lend him $13 billion if he acquires the microblogging platform, with a mix of secured bank loans and junk bonds. Other than this, Musk has received a letter from his banks offering to lend him an additional $12.5 billion for the takeover effort, which would be secured by $62.5 billion worth of his Tesla stock, or about one-third of his stake.