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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 the Wall 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 the Wall 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

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