Widely recognized for its efforts to execute a smooth transition into a clean energy company, Tesla is reportedly turning to investors for fresh capital.
The Elon Musk-led company has announced that it plans to raise an additional funding of up to $1.15 billion as it gears up for the mass production of its much-anticipated electric vehicle, the Model 3.
As per the company’s public statements, Tesla is offering $250 million of common stock, as well as $750 million in aggregate principal amount of convertible senior notes due 2022. Both the underwritten public offerings collectively amount to a net sum of $1 billion.
Apart from that, Tesla also waved the green flag at underwriters to go along with the purchase of an additional (up to) 15% on top of each individual offering. With that added to the tally, the maximum amount the company could potentially raise touches the $1.15 billion mark.
The new offering will be participated by Tesla founder and CEO Elon Musk himself. According to TechTimes, Musk will be purchasing $25 million of the common stock offered.
Worth noting, analysts have been expecting this move from Tesla for about a year now. The speculations were fueled by a statement by Musk last year in which he said that the company was “close to the edge” on its requirement for cash. Many observers even went on predicting that Tesla would be trying to raise as much as $2.5 billion.
Tesla is anticipating an expenditure of $2 billion to $2.5 billion over the first half of 2017. With that into consideration, the additional funding of up to $1.15 billion will definitely provide the company with an extra safety net as the mass production of the Model 3 begins this July.
On a related note, the recent rumors suggesting Tesla was yet to finalize the design of the Model 3 was countered by a leaked image of a Model 3 prototype. Especially considering that the image featured a car that appeared to have been in the final phases of the design process.