Tesla to raise $830m in stock and debt offering to repay outstanding loans

Palo Alto, California: Tesla Motors Inc, which posted its first-ever quarterly profit last week, said on Wednesday that it aims to raise $830 million (Dh3 billion) through a stock and debt offering that will be used to repay its US Department of Energy (DOE) loans with interest.

Chief Executive Elon Musk, who has led the company since October 2008, will personally buy Tesla shares worth $100 million as part of this latest fundraising round.

The offering comes at a time when Tesla shares are handily outperforming the Nasdaq. Since reporting first-quarter earnings on May 8, Tesla shares have risen about 50 per cent, while the index has risen just 2 per cent.

Underwriters

Tesla said it will use the proceeds from the offerings to repay the remaining portion of its $465 million DOE loan, pay the cost of convertible note hedge transactions and for general corporate purposes.

The electric carmaker will offer 2.7 million common shares as well as $450 million in convertible senior notes due in 2018. Tesla has also granted its underwriters a 30-day option to buy an additional 405,454 common shares and $67.5 million in notes.

Musk, who is also a Tesla cofounder, will buy common shares at the same public offering price. About $45 million would be bought through the common stock offering announced on Wednesday and another $55 million would be purchased directly from Tesla in a subsequent private placement, the company said.