Musk says that Saudi fund requested him to delist Tesla
SAUDI Arabia’s sovereign wealth fund is working to be part of any investor pool that emerges to take Tesla private, as Elon Musk enters a week where his plan will draw added scrutiny from the electric-car manufacturer’s board, advisers and investors.
The Saudi Kingdom’s Public Investment Fund, which recently built a stake just shy of 5 percent in Tesla, is explor- ing how it can be involved in the potential deal, according to people with knowledge of the fund’s plans.
But the potential transaction’s staggering $82 billion (R1.15 trillion) price tag means Tesla is still likely to need to tap other sources of cash.
Musk elaborated on what precipitated his effort to take Tesla private, portraying the interest that Saudi Arabia’s sovereign wealth fund has shown in the electric-car maker as key to the gambit.
The Saudi Kingdom’s Public Investment Fund had ap- proached Musk going back almost two years about taking Tesla off the market, he wrote in a blog post yesterday.
Musk described a July 31 meeting in which the Saudi fund’s managing director expressed regret that Tesla hadn’t moved forward with a go-private transaction.
“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 wrote in the post.
He said tweeted on August 7 that he had “funding secured” to take Tesla private at $420 a share.
Musk said he has continued to communicate with the Saudi fund managing director, whom he didn’t identify by name.
He said he’s been reaching out to Tesla’s largest shareholders and that most of the capital required to take the company private will be funded by equity, rather than debt.
“The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private,” he wrote. “My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.”
Tesla board members are preparing to meet with financial advisers this week to evaluate Musk’s proposal.
Directors will probably tell Musk, the chairperson, to recuse himself, according to CNBC, and they have told him to hire his own separate advisers. Musk is hoping to avoid having one or two large stakeholders in the company. – Bloomberg