Controversial American billionaire Elon Musk used money from his own assets, investment funds, and bank loans, among other sources, in his acquisition of Twitter.
Here are the details of the financing of the operation, which closed on Thursday.
Mask’s money
Initially, the Tesla boss hoped to avoid contributing more than $ 15 billion of his own money to the $ 44 billion deal.
Much of that amount, roughly $ 12.5 billion, was to come from loans backed by its Tesla stock, meaning it wouldn’t have to sell those shares.
Eventually, Musk ditched this idea of loans and set aside more cash loans. The 51-year-old sold about $ 15.5 billion of Tesla stock in two phases, in April and August, and Musk paid $ 27 billion in cash with his own money in the deal.
More importantly, Musk, who according to Forbes magazine has about $ 220 billion in assets, owned 9.6 percent of Twitter’s stock at the beginning of the year.
investment funds
The total amount of the deal also includes $ 5.2 billion from investment groups and other large funds, including a contribution from businessman Larry Ellison, co-founder of software company Oracle, who signed a check for $ 1 billion as part of organizing the deal.
Qatar Holding Company, controlled by Qatar’s sovereign wealth fund, the Qatar Investment Authority, also invested in the fund.
Saudi Prince Al-Waleed bin Talal has transferred the approximately 35 million shares he owned in the Qatar Investment Authority to Elon Musk in exchange for their investments. The investors will become Twitter shareholders, according to AFP.
loans
As for the rest of the amount needed to complete the transaction – about $ 13 billion – it was backed by loans from banks including “Morgan Stanley”, “Bank of America”, the Japanese bank “Mitsubishi Financial Group. “, the Japanese” Mizuho “Bank,” Barclays “, the French” Société Générale “and the Bank of France. BNP Paribas.
According to filings with the US Securities and Exchange Commission, Morgan Stanley’s contribution alone is approximately $ 3.5 billion.
These loans are guaranteed by Twitter and the company, not Musk himself, will take the financial responsibility of repaying them.
Twitter has struggled to generate profits so far and has experienced an operational loss during the first half of 2022, which means that the debt arising from the Musk acquisition could add further financial pressure to it.
