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Musk Clarifies Private Tesla Comments, Has Spoken With Saudi Fund

Saudi Arabia’s sovereign wealth fund is what Tesla founder Elon Musk was referring to when he said he already was in a position to secure funding should the car company go private, Musk said in a statement Monday.

Musk said recently that he was considering taking Tesla private, at $420 a share, and noted in Monday’s statement that the fund has more than enough capital, and that he met with fund officials on July 31.

“I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving,” Musk said. “This is why I referred to ‘funding secured’ in the August 7th announcement.

“Following the August 7th announcement, I have continued to communicate with the Managing Director of the Saudi fund,” Musk continued. “He has expressed support for proceeding subject to financial and other due diligence and their internal review process for obtaining approvals. He has also asked for additional details on how the company would be taken private, including any required percentages and any regulatory requirements.”

Musk has come under criticism lately for production issues at Tesla, as well as a sometimes rocky relationship with investment analysts and the media.

He said talks continue.

“I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base,” Musk said. “It is appropriate to complete those discussions before presenting a detailed proposal to an independent board committee.”

Musk also clarified that most of the capital needed to take the company private would be funded by equity investment, rather than borrowing, :meaning that this would not be like a standard leveraged buyout structure commonly used when companies are taken private. I do not think it would be wise to burden Tesla with significantly increased debt,” he said.

“Therefore, reports that more than $70B would be needed to take Tesla private dramatically overstate the actual capital raise needed,” Musk added. “The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private. My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.”


About David Royse

David Royse
David Royse is the Editor-in-Chief of Ledetree.com. He has been a professional journalist for more than 20 years, including stints with The Associated Press and The News Service of Florida. He enjoys writing about health and medical science, and hopeful stories about scientific breakthroughs and new technology.

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