Petro-Dollars May Propel Elon Musk’s Dream Of A Private Tesla

Tesla Chief Executive Officer (CEO) Elon Musk has said that Saudi Arabia’s sovereign-wealth fund has approached him multiple times in the last two years offering to provide financial support to take Tesla Inc private.

“They (Saudi Arabian sovereign wealth fund managers) first met with me at the beginning of 2017 to express this 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,” he said in a blog post.

Musk, however, clarified that a deal has not been finalised. He said the Managing Director has expressed support for proceeding with financial and other due diligence, and their internal review process for obtaining approvals.

Saudi fund managers have also asked Tesla to provide additional details on how the company would be taken private, including any required percentages and any regulatory requirements, Musk added.

Musk’s disclosure of his discussions with the Saudi wealth fund comes six days after he surprised his company investors by announcing on Twitter that he was contemplating taking Tesla private at a price of $420 per share and that the funding was “secured”.

Tesla’s shares fell 2.4 per cent last week after the Wall Street Journal reported that the US Securities and Exchange Commission has sought explanation from Tesla on why its CEO announced his plans on Twitter (instead of a regulatory filing) and whether his statement (on securing private funding) was indeed true.

Musk could face investor lawsuits if it can be established that he did not actually have secure financing at the time of his tweet. Sceptics expressed apprehension about Tesla’s ability to mobilise enough financial backing to privatise.