Elon Musk Says ‘Funding Secured’ Tweet Followed Meeting With Saudis
(Bloomberg) -- Tesla’s Elon Musk says in a blog post he reported the funding was secured for a go-private transaction after meeting with the Saudi Arabian sovereign wealth fund on July 31, after the Saudi fund bought almost 5 percent of Tesla stock.
- “During the meeting, the Managing Director of the fund 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”
- Musk says most of the capital required for going private will be funded by equity rather than debt, meaning the transaction would not be like a standard leveraged buyout structure; says would not be wise to burden Tesla with significantly increased debt
- Says reports that $70 billion would be needed to take the company private “dramatically overstate” the actual capital raise needed
- “The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private”
- Musk was reported to prefer gathering the funds for Tesla’s potential go-private transaction from a larger group rather than one or two large stakeholders
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