In this post, you will learn about the most indebted companies in the world in 2022. When companies want to raise cash for their businesses, there are two main ways to go about this. The first one is to issue equity and get investment in return. This is why most major companies opt for IPOs or initial public offerings, where shares of the company are issued for a set price initially, which is then dictated by market dynamics.
When people start a company, they generally require investment to scale up their ambitions, and these companies are private at the time. They then invite investors and pitch their project and their company and offer a part of their company in exchange for the investment. The best kind of example for this is the TV show Shark Tank, where people who have started companies pitch their idea and financials to get major investors to invest in their companies while also providing expertise gained from decades of experience.
Another way to raise money is debt. Debt involves borrowing money, often from banks, to fund operations and paying it back based on a specific term along with interest. There are several reasons that companies may opt for debt rather than equity with the primary one being that taking on debt does not lead to dilution of ownership, thus ensuring that profits stay within the company rather than losing out in the form of interest and principal payments.
Recommended: 12 Most Advanced Countries in Robotics
Debt also helps increase tax savings as interest is an allowable tax expense and hence lowers the profit calculation for tax purposes. Further, debt is generally considered to have a lower finance cost as opposed to equity.
Some of the biggest companies in the world are also some of the most indebted companies in the world. The total debt of the 22 most indebted companies globally is more than $2.5 trillion, bigger than most economies in the world.
Top 22 Indebted Companies in the World 2022.
22. Electricité de France
Total debt of the company in the latest financial year (in millions): $60,505
Electricité de France is an electric utility company in France which is majority owned by the state. It is one of the few utility companies in the world to operate nuclear reactors.
21. Duke Energy Corporation
Total debt of the company in the latest financial year (in millions): $68,213
Duke Energy Corporation (NYSE:DUK) is an electric power and natural gas holding company which is headquartered in North Carolina and serves multiple states in the country.
20. Enel SpA
Total debt of the company in the latest financial year (in millions): $74,465
Enel is owned by the Government of Italy and is one of the biggest manufacturers of gas and electricity in the world, and the biggest in Italy.
19. Oracle Corporation
Total debt of the company in the latest financial year (in millions): $75,859
Oracle Corporation (NYSE:ORCL) has been one of the biggest software companies in the world for several years now. Currently, Oracle Corporation (NYSE:ORCL) provides enterprise resource planning software, human capital management software and customer management software management, among others.
18. Hyundai Motor Company
Total debt of the company in the latest financial year (in millions): $82,645
Hyundai Motor Company is a South Korean automotive manufacturer and also owns close to 34% of KIA Corporation.