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Tesla Motors raises US$1bn as it readies for Model 3 launch
Tesla Inc (NASDAQ:TSLA) rallied as it raised less money than expected for the launch of its mass market electric car, the Tesla 3 range.
Elon Musk, Tesla’s chief executive, had already warned a fund raise was on the way, but at US$1bn the amount was below the figure many analysts had forecast.
The financing will comprise US$250mln in new shares and US$750mln of convertible senior debt.
Musk, who will invest US$25mln personally, said there would be hedges in place to cap any potential dilution from the convertible notes.
Tesla has raised around $9bn in the past five years, but its market value is now US$42bn due to the excitement over the potential of its new car.
An overallotment provision will allow the underwriters to sell an extra 15% of the share element if demand is strong.
Musk said last month that Tesla intended to spend US$2bn – $2.5bn ahead of the start of Model 3 production in July.
Cash at the end of its last quarter was more than US$3bn, but Musk said Tesla needed a capital buffer as spending would go up even more as it integrates its recently acquired Solar City business and beefs up its manufacturing operation.
Shares rose 2.2% to US$261.37.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/174933/tesla-motors-raises-us1bn-as-it-readies-for-model-3-launch-174933.html
