In a public letter to investors Monday morning, Tesla CEO Elon Musk expanded on details of his plan to take the company private.
Musk announced Aug. 4 on Twitter that he was considering a privatization plan and had funding “secured.”
In the letter Monday, he revealed that he has been in discussions for almost two years with the sovereign wealth fund of Saudi Arabia about taking the company private.
He said he last spoke with the managing director of the nation’s private investment fund July 31, when the director “expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time. I understood from him that no other decision makers were needed and that they were eager to proceed.”
‘Revenge of the Electric Car’ premiere: Elon Musk arrives in a Tesla Roadster
A Reuters report over the weekend cast doubt on that analysis, citing two sources familiar with the fund’s strategy. One source said the fund was not currently getting involved in any funding process for taking Tesla private. The other said it was not taking part in any such plan at this stage.
However, the Saudi sovereign wealth fund recently bought roughly 5 percent of Tesla’s public shares.
Musk is under pressure to explain the source of his “funding secured” statement from investors and the SEC, which has launched an investigation into Musk’s communications.
Tesla Model 3 all-wheel drive Performance rolls off a new assembly line in a temporary structure
In his letter Monday, Musk said he informed Tesla’s board of his plan Aug. 2, three days after his meeting with the Saudi sovereign wealth fund manager, and that he had since had discussions with other large Tesla shareholders about the plan in response to a directive from the board. “I would like for Tesla to continue to have a broad investor base.”
The day after his tweet, the Tesla board confirmed that it was considering Musk’s plan to take the company private.
Musk also noted in the letter that he expects financing for the buyout to come in the form of equity, rather than debt, and said estimates that it would cost roughly $70 billion to buy out existing shareholders were inflated. Musk said he expects about two-thirds of Tesla’s shareholders to hold their stock if the company were to go private.
DON’T MISS: Elon Musk announces he’s considering taking Tesla private (Updated)
In a statement that concerned some financial observers, Musk said in the letter: “To be clear, when I made the public announcement, just as with this blog post and all other discussions I have had on this topic, I am speaking for myself as a potential bidder for Tesla.”
That statement concerns some financial observers who worry that Musk’s communications as the company’s CEO and largest shareholder could violate laws regarding financial disclosure and stock manipulation.
View original article at: “https://www.greencarreports.com//news/1118203_tesla-ceo-elon-musk-reveals-talks-with-saudi-fund-to-take-tesla-private-others-express-doubt”
