Tesla seeks to raise about US$500m through sale of shares

[BENGALURU] Electric-car maker Tesla Motors Inc said it planned to raise about US$500 million through the sale of 2.1 million shares.

Chief Executive Elon Musk will buy nearly 84,000 shares for about US$20 million in the offering, the company said on Thursday. Tesla's shares were up 2.2 per cent at US$243.50 in premarket trading. Tesla said it assumed the shares would be sold at Wednesday's closing price of US$238.17.

Musk is already the company's largest shareholder with 22.25 per cent stake.

Tesla had 127.1 million shares outstanding as of July 30.

The offering comes a week after Tesla reported a larger quarterly loss and said it may raise more cash to offset heavy spending on increasing production.

Up to Wednesday's close, Tesla's shares had fallen 12 per cent since Aug 5 when the company reported its results.

The underwriters have a 30-day option to buy up to US$75 million of additional shares, Tesla said.

The company said it intended to use the proceeds for development of its energy business, its upcoming Model 3 project, its battery Gigafactory and other general purposes.

Goldman Sachs & Co and Morgan Stanley are lead joint book-running managers for the offering, while JP Morgan and Deutsche Bank Securities are additional book-running managers.

BofA Merrill Lynch and Wells Fargo Securities are co-managers.

REUTERS