Economy

Saudi Arabia's PIF Has Shown No Interest In Bankrolling Tesla Buyout

Saudi Arabia's PIF Has Shown No Interest In Bankrolling Tesla Buyout”

Almost a week after Tesla CEO Elon Musk tweeted his intention to take the company private, we still don't know much about the funding for the endeavor - which Musk said was "secured". The US Securities Exchange Board has questioned the authenticity of Musk's tweets.

Tesla Inc. Chief Executive Elon Musk said he has been in talks with the Saudi Arabian sovereign-wealth fund about taking the electric-car maker private and believes two-thirds of current shareholders would remain with the company, lessening the capital needed to make a deal work. They are canvassing investors including large asset managers, the people said.

For Saudi Arabia, an investment in Tesla could act as a hedge against the long-term decline of oil.

The PIF and Tesla didn't respond to requests for comment.

The tweets are aimed at "shorts", or investors who borrowed shares of Tesla and immediately sold them with the hope that Tesla's share price would fall.

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According to the report, which cites people with knowledge of PIF's plans, the fund is working to be a part of "any investor pool that emerges" to take Tesla private. The Saudi fund hasn't made any firm decisions on whether to increase its stake, or by how much, but talks are ongoing, sources told Bloomberg.

In a blog post, Mr Musk said that he only wanted to buy out shareholders who no longer wanted to own Tesla shares.

Wall Street is awash with speculation on who might team up with Musk to do a deal. Bloomberg attributed the information to a person familiar with the discussions.

Reuters reported on August 11 that the PIF has shown no interest so far in financing Musk's proposed deal, while CNBC said on August 9 that Musk previously talked with the Saudi fund about a take-private deal, citing one person familiar with the matter. The group's Vision Fund - an nearly $100 billion pool of capital dedicated to investing in the industry - has recently invested in coworking company WeWork Co. and food-delivery service DoorDash Inc.

Musk had discussed going private with SoftBank CEO Masayoshi Son previous year but the duo failed to come to an agreement regarding ownership of the company. In a tweet on Sunday, the nation's Energy Department said Saudi Arabia now is working to develop a city to support the supply of raw materials and parts for the automobile industry.



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