Australia, insurance, car, home, live, holidays

Musk bought Twitter in November 2022 in what he has said was a mission to save free speech and defeat the “woke mind virus”.

He has since renamed it X and cut the majority of staff,but the company’s value has declined dramatically.

X told staff last year that the company was now valued at US$19 billion,less than half of Musk’s purchase price.

It also warned that advertising revenue had plunged,in part owing to major advertisers boycotting the service.

Banks typically seek to sell large loans after providing financing for buyouts,in an attempt to shield themselves from downturns and free up capital for more lending.

However,they have held onto the Twitter loans because selling them would incur major losses.

X has continued to pay hefty interest on the loans,affecting Musk’s quest to make the company profitable.

It is paying around $US1.5 billion annually to service the debt,almost a third of the company’s $US5 billion revenue in the year before it was taken over.

The banks have reportedly marked down the values of the loans by hundreds of millions of dollars.

According to theWall Street Journal, compensation for top dealmakers at Barclays was cut by 40 per cent last year in part because of the Twitter loan.

Although financing the deal was seen as risky by some of the banks,taking part in the takeover was seen as a way of burnishing relationships with Musk ahead of other potentially lucrative transactions.

His rocket company SpaceX,or its satellite internet subsidiary Starlink,are seen as potential candidates for Wall Street listings,while xAI,his artificial intelligence company,recently raised $US6 billion.

Musk has said X has lost around half of its advertising revenue since he bought the company.

He recently sued advertising body Garm over claims of an “illegal boycott”,declaring:“We tried peace for two years,now it is war.” The trade group was subsequently discontinued.

MUFG,one of the banks that lent funds to X for the deal,told theWall Street Journal:“MUFG has had several constructive conversations with Mr Musk and his leadership team. We anticipate reaching a positive outcome regarding repayment.”

Barclays and X did not respond to requests for comment.

The Telegraph,London

The Business Briefing newsletter delivers major stories,exclusive coverage and expert opinion.Sign up to get it every weekday morning.