Tesla looking to go private with backing of Saudi fund

Elon Musk has confirmed plans to take Tesla private with the backing of a Saudi Arabian sovereign wealth fund. In a statement published on the company’s official website, the Tesla CEO also admitted that he was first approached for the move almost two years ago.

According to Musk, the Saudi sovereign fund expressed its interest in order to diversify from oil and “has more than enough capital needed to execute on such a transaction.”

On August 2, Musk notified the Tesla board about his intention to take Tesla private at US$420 per share – a 20% premium. In his proposal, existing shareholders could remain as they are in a private Tesla, or agree to the buyout amount per share.

Tesla looking to go private with backing of Saudi fund

Following that, Musk met with the Saudi fund representatives on July 31, which has already accumulated almost 5% of Tesla stock via public markets. The fund’s managing director “strongly expressed his support for funding a going private transaction for Tesla,” said Musk.

This lead to an official announcement on August 7 that Tesla is looking to go private, but Musk says details of the deal are still being ironed out. The Tesla CEO did clarify that “most of the capital required for going private would be funded by equity rather than debt” so as not to burden the company with more liabilities.

Musk also dismissed reports that US$70 billion would be required to take Tesla private, estimating that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.

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