Published: Mon, August 13, 2018
Economy | By

Saudi Arabia's PIF has shown no interest in bankrolling Tesla buyout

Saudi Arabia's PIF has shown no interest in bankrolling Tesla buyout

A Tesla spokesman declined to comment on behalf of the company and Musk. The country's Public Investment Fund, which has built up a stake of nearly 5 per cent in Tesla in recent months, is exploring how it can be involved in the potential deal, according to Bloomberg.

In a letter to employees on Tuesday, Musk suggested a choice for shareholders of selling their shares for $420 each or remaining investors in a private Tesla. While the entrepreneur owns 20 percent of Tesla, more than $60 billion would be needed to buy the business from public shareholders.

A Saudi sovereign wealth fund is in talks that could make it a significant investor in Tesla if it is taken private.

The board will make a decision on whether to hire advisers and launch a formal review of Musk's take-private proposal in the coming days, based on how much detail on the financing plan it receives from Musk, another source said.

Musk is interested in having a wide pool of investors rather than few stakeholders.

The 47-year-old investor and engineer stunned financial markets on Tuesday when he said on Twitter that he was considering a take-private deal for Tesla, an auto manufacturing pioneer that developed the world's first luxury all-electric sedan vehicle. He is yet to back up his claim that he has financing for the transaction.

According to Reuters, the separate lawsuits by Kalman Isaacs and William Chamberlain accuse Tesla and Musk of issuing statements that are in violation of securities law, artificially boosting the stock price, and putting a squeeze on short sellers. At least two investors have sued Musk and Tesla alleging share-price manipulation.

Musk argued any such move would protect the company from swings in the stock market, and improve Tesla's ability to think long term, as opposed to chasing quarterly targets.

Tesla was reportedly courted by Japan's SoftBank in April of previous year, though sources told Bloomberg on Monday that the conglomerate isn't planning to participate in deals for Tesla's buyout as it has already vested interest in other auto makers and autonomous vehicle programmes, like General Motors.

The fund has not yet made any concrete plans with Tesla on increasing its stake, sources told Bloomberg, but talks are ongoing, and continued investment in the company is seen as a strategic step toward diversifying the Saudi economy away from oil.

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