Tesla chief executive Elon Musk said on Monday he was still in talks with potential backers of a possible buyout of the company, including Saudi Arabia’s sovereign wealth fund, but had not completed securing the funding.
In a blog post, Musk said the Saudi fund had been pushing to take the electric carmaker private in talks dating back nearly two years and also backed the deal last week.
The post fleshed out the Silicon Valley billionaire’s shock announcement on Aug. 7 that he was considering taking the company private and had “secured” funding. But Tesla shares were down slightly in morning trading, suggesting investors are yet to be convinced.
“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.
He said that since his Twitter posts on the possibility of a deal the managing director of the Saudi fund had expressed support for proceeding subject to financial and other due diligence.
Saudi Arabia’s Public Investment Fund (PIF) is known for its technology investments, including the $45 billion US it has spent in SoftBank Group Corp’s Vision Fund.
The fund did not immediately respond to a request for comment. Tesla declined to comment further beyond Musk’s blog post.
“They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil,” Musk wrote.
“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.”
Several analysts have said going-private would make sense for Tesla but expressed skepticism about the company’s ability to raise the required funds.
Musk’s failure to promptly file a formal disclosure has led to lawsuits from investors, accusing Tesla of fraudulently planning to squeeze short-sellers.
“I left the July 31st meeting (with the fund) with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving,” Musk said.
“This is why I referred to ‘funding secured’ in the August 7th announcement.”
Musk said that after discussions on the deal last week with both outside directors and the full board it had been agreed that the next step was for him to consult with major shareholders.
He said he estimated about two-thirds of existing shareholders would roll over into the private Tesla and that as a result the capital required for a buyout deal would be less than the market value of company.
After opening sharply higher, Tesla shares were down by just 0.25 per cent at $354.60 in morning trading on Monday, almost eight per cent below last week’s peak.