Saudi Arabia’s Wealth Fund Looking To Invest In Tesla Buyout

Saudi Arabia’s Wealth Fund Looking To Invest In Tesla Buyout

Saudi Arabia’s Wealth Fund Looking To Invest In Tesla Buyout

Saudi Arabia's sovereign wealth fund has been pushing to take electric carmaker Tesla private in talks with Chief Executive Elon Musk dating back almost two years and also backed the deal last week, Musk said in a blog post on Monday.

Musk published a blog post confirming a report that Saudi Arabia's Public Interest Fund would be the previously unknown party bankrolling the move to re-privatize the company - and revealing that his tweet last week claiming "funding secured" was merely an assumption on his part.

Going back nearly two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private. In a blog post that further seeks to make the case that Tesla should go private, Musk attempted to address his critics who have attacked his tweet and questioned whether he may have engaged in stock manipulation or securities fraud. "However, it wouldn't be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time".

"They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil", Musk wrote.

The Public Investment Fund approached Musk several months ago to discuss buying a minority stake, but he initially resisted the investment and said there were no plans to issue new shares, according to a different person familiar with the talks at the time. If shareholders also approve, then each shareholder would have to decide whether to take $420 per share in cash-or to accept shares in the new, private Tesla instead. He wrote that since the meeting, he has maintained contact with the fund's managing director - suggesting that discussions are continuing. That's why he tweeted on August 7 that the funding had been secured, Musk wrote.

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He added that most capital for the deal would come from equity and it would not be "wise" to burden the company with added debt.

As a result, Tesla shares jumped 11 per cent, causing so-called short-sellers who have been betting on the stock crashing for years to lose millions. Musk is holding talks both with other potential funders and with Tesla's existing large shareholders.

The founder of the electric vehicle maker also indicated that he would need to raise about $23bn, not the $70bn that had been reported.

Elon Musk stunned investors last week with his tweet.

If and when a final proposal is presented, an appropriate evaluation process will be undertaken by a special committee of Tesla's board, which I understand is already in the process of being set up, together with the legal counsel it has selected. "The only reason why this is not certain is that it's contingent on a shareholder vote".

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