Musk confirms Saudi sovereign fund wants to pull Tesla off market

Musk confirms Saudi sovereign fund wants to pull Tesla off market
Click for full image
Photo: ANI

Washington: Tesla Motors founder Elon Musk said on Monday that in late July he met with Saudi Arabia sovereign fund representatives to discuss the electric carmaker’s possible exit from the stock market.

Musk said in a statement posted on the Tesla Web site that the Saudi sovereign fund had first contacted him “at the beginning of 2017 to express (their) interest because of the important need to diversify away from oil”.

“They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a going private transaction. Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction,” Efe quoted him as saying.

“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,” he said.

He said he had most recently met with the Saudis on July 31 and left that meeting “with no question that a deal with the … fund could be closed, and that it was just a matter of getting the process moving”.

“This is why I referred to ‘funding secured’ in the August 7th announcement,” he said, referring to his surprise tweet on that date that he was thinking about taking Tesla private.

According to Musk, “two thirds” of Tesla’s current stockholders would be interested in continuing to hold the firm’s shares once it goes private.

On August 7, Musk surprised the investment world with a Twitter announcement that he was considering taking Tesla private and that the funds needed to do so – which some financial analysts estimate at more than $70 billion – were “secured”.

Musk’s tweet caused a financial firestorm with Tesla shares immediately skyrocketing by almost 11 per cent, although in the coming days they lost a good part of what they had gained.

The Securities and Exchange Commission asked Tesla to report whether Musk’s tweets were valid and asked him why he had not made the announcement in an official statement to the markets and investors.

Last Friday, Musk was sued by investors who accused him of having made the announcement to take the firm private to harm so-called “short sellers”, people who sell the firm’s shares anticipating a drop in the market price and with whom Musk has been engaged in open warfare for some time, contending that they are harming the firm’s growth plans.

The Saudi sovereign fund already owns about 5 per cent of the outstanding Tesla shares, Musk said.

IANS