Clean Transport

Published on March 20th, 2017 | by James Ayre

0

Tesla Upped Capital Raise To ~$1.38 Billion (From $1.15 Billion) Owing To High Investor Demand

March 20th, 2017 by  

We reported last week on Tesla’s announcement concerning a capital raise of $1.15 billion (common shares + convertible debt). That news is already out of date, though, as Tesla [TSLA] apparently went ahead and increased that capital raise to ~$1.38 billion (from $1.15 billion), owing to high demand from investors.

The initial plan had been for the issuance of 968,993 common shares of the company’s stock. This figure was increased to 1,335,878 shares of stock. So, the company ended up raising around $350 million more via common stock than had originally been planned.

Teslarati provides more: “In addition to an increase in the common stock offering, Tesla also raised $850M from a convertible debt sale with an additional $127.5M available to the underwriters. The company initially intended to offer $750M in debt and raised that by $100M to meet demand. We will know within 30 days whether the underwriters decide to exercise their options to purchase, which would net Tesla an additional ~$180M. If the underwriters exercise their options, then the total proceeds of the sale will net $1.38B. This capital raise is intended to ‘de-risk’ the company’s financial condition as they focus on getting the Model 3 into production this year.

“Tesla’s bond offering of $850M consisted of 2.375% Convertible Senior Notes due March 15, 2022. Compared to previous convertible bond offerings, Tesla increased the interest rate on the bonds while lowering the ‘conversion’ premium. The conversion premium allows for the bond holder to exchange their bond for common stock, Tesla has set the price of that conversion at $327.50, which is roughly 25% above current market value. Previous convertible bond offerings had a conversion premium of 42.5% above their respective market values and interest rates of .25% and 1.25%. (This analysis does not look at the debt offering SolarCity had before the Tesla-SolarCity merger last fall.)”

For related information, see: Tesla Offers $250 Million Of Common Stock + $750 Million Convertible Senior Notes.


Check out our new 93-page EV report.

Join us for an upcoming Cleantech Revolution Tour conference!

Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech daily newsletter or weekly newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.

Tags: ,


About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.



Back to Top ↑