Last Updated Aug 13, 2018 11:09 AM EDT
Tesla CEO Elon Musk says hiscame after a meeting with Saudi Arabia's government-direct investment fund that left him certain a deal would be reached to take his electric-car company private.
"I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to 'funding secured' in the August 7th announcement," Musk wrote Monday in a blog post. He wrote that since the meeting, he has maintained contact with the fund's managing director — suggesting that discussions are continuing.
The meeting came after the Saudi fund bought almost 5 percent of Tesla stock, wrote Musk, who added that most of the capital needed to go private would be funded by private equity rather than debt.
"This would not be like a standard leveraged buyout structure commonly used when companies are taken private," he said, adding he didn't think it would be wise to saddle the company with significantly increased debt.
"Therefore, reports that more than $70B would be needed to take Tesla private dramatically overstate the actual capital raise needed," Musk added.
Investors who prefer not to stick with a private company would be paid $420 per share, said Musk, who added that he expects a third of shareholders to sell.
took a roller coaster ride after Musk revealed he was considering to take the company private. On Monday, Tesla rose 0.3 percent, or $1.03, to $356.52.
A leveraged buyout of Tesla, which went public in 2010 and has a market capitalization of nearly $61 billion, would represent an abrupt change in financial strategy. If shareholders approved a deal, it would remove Tesla from Wall Street scrutiny, eliminating the need to publicly disclose its earnings and -- for Musk -- having to explain himself to shareholders.
Musk rattled investors last week by announcing in an unusual way that he might take Tesla private, with both his posts on social media and a letter to employees making no mention of the Saudi fund.
A handful of investors have filed lawsuits against Tesla and Musk, claiming the company's share price had been manipulated.