Tesla CEO Musk drops pursuit of $72bn take-private deal

Tesla Inc chief executive Elon Musk said late on Friday that he would listen to the interests of shareholders and would no longer deal with a $ 72 billion deal to take on the role of a private electric vehicle, abandoning the idea that stunned investors and attracted attention of regulators.

The decision to leave Tesla as a publicly listed company raises new questions about its future. Tesla shares traded well below their levels on Aug. 7, when Musk announced on Twitter that it is considering raising Tesla for $ 420 per share, as investors were wondering what it meant for Musk's ability to manage the company to profitability.

Musk and Tesla also face a number of lawsuits with investors and the US Securities and Exchange Commission on the fact of the reliability of the tweet Musk that the financing of the deal was "secured".

Musk said on Friday that his belief is that in this process there were more funds to attract a private company, but he said he declined the application on the basis of feedback from shareholders and because the efforts proved to be more laborious and distracting than expected.

"Although most of the shareholders I spoke with said they would stay with Tesla, if we go into private property, the mood, in a nutshell, was" please do not do this, "Musk wrote in a blog post.

Musk, which owns about a fifth of Tesla, previously stated that he had assumed that the company was closed without a standard method of buying out borrowed funds, in which all other shareholders would receive cash, and the deal would be financed mainly through a new debt.

According to Musk, two thirds of Tesla shareholders chose to "roll" their shares to a private company. This would significantly reduce the amount of money needed for the transaction, and avoid further encumbrance of Tesla, which has a stack of debt of $ 11 billion. US and negative cash flow.

However, Musk said on Friday that a number of institutional shareholders explained that they have internal compliance problems that limit how much they can invest in a private company. He also said that there was no proven path for most retail investors to own shares if Tesla had become private.

This contrasts sharply with the tweet on August 7, when Musk said: "Support for investors is confirmed."

T. Rowe Price Group, Fidelity Investments and Scotland Baillie Gifford, who are the leading shareholders of Tesla, declined to comment. (Reuters)

Musk also said earlier that Saudi Arabia's investment fund, which bought a stake in Tesla at the beginning of this year of just under 5 percent, could help finance the money part of the deal, although sources close to the sovereign wealth fund lost this prospect. PIF is in talks to invest in the aspiring rival Tesla Lucid Motors Inc, Reuters reported last Sunday.

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