Tesla founder Elon Musk confirms he is in talks with Saudi Arabia about taking his company private
Tesla chief executive Elon Musk said Monday he was in talks with Saudi Arabia's sovereign wealth fund and other investors to take the electric automaker private.
The revelation comes days after Musk's claim in an August 7 Twitter post that financing for a deal to take Tesla private had been "secured."
Musk said in a blog post on Monday he had "no question" that the Saudis would finance such a transaction following a July 31 meeting.
The transaction would be structured with equity so as not to burden Tesla with crushing debt, Musk added.
"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 wrote.
"It is appropriate to complete those discussions before presenting a detailed proposal to an independent board committee."
Musk's surprise comments last week sparked speculation he would need to borrow massive amounts to take Tesla private, a move that could allow the company to operate without requirements for financial reports and other pressures of a publicly traded firm.
In his blog Monday, Musk said that reports that more than $70 billion would be needed to take Tesla private "dramatically overstate the actual capital raise needed" because he expected some shareholders to remain invested in the firm.
His comment that he wanted to launch a buyout at $420 a share "would only be used for Tesla shareholders who do not remain with our company if it is private," Musk said in the blog.
"My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla."
Musk added that the Saudi Arabian sovereign wealth fund "has approached me multiple times" starting in early 2017 about taking Tesla private.
He said the Saudis were interested "because of the important need to diversify away from oil" and added that the sovereign fund "has more than enough capital needed to execute on such a transaction."
Tesla shares jumped one percent at the opening to $359.28.
California-based Tesla has become one of the most valuable automakers on expectations it will disrupt the industry, although it produced only slightly more than 100,000 vehicles last year.
The company has been struggling to boost production of its Model 3, which is less expensive than its first models and could held expand Tesla's base.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.