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August 13, 2018 10:30 AM, EDT

Tesla CEO Elon Musk Says ‘Funding Secured’ Tweet Followed Meeting With Saudis

Tesla closeup AP

Tesla’s Elon Musk said in a blog post he reported the funding was secured for a go-private transaction after meeting with the Saudi Arabian sovereign wealth fund July 31, after the Saudi fund bought almost 5% 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.”

Elon Musk

Musk

Musk said 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. He said it would not be wise to burden Tesla with significantly increased debt.

He added that 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,” he wrote.

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.