Saudi Arabia’s sovereign wealth fund is interested in investing into Tesla, now that Elon Musk attempts to take the Palo Alto-based EV maker private.
The Saudi Kingdom’s Public Investment Fund (PIF) wants to be part of any investor pool that will be created to take Tesla private, Bloomberg reports citing people with knowledge of the matter. The fund has recently built a stake just shy of 5 percent in Tesla.
The potential transaction will cost a jaw-dropping $82 billion, with Musk hoping to avoid having one or two large stakeholders in a company. Instead, he would prefer to gather the funds from a larger group of inverstors, according to the same sources.
At least two investors have sued Musk and Tesla alleging share-price manipulation. Musk owns 20 percent of Tesla Motors.
“The question is still around Tesla’s future sales. This is essentially a chicken-and-egg problem,” Nannan Kou, a senior associate at Bloomberg said. “At this stage, it is hard for Tesla to convince the general investors that delivery will ramp up quickly. So the potential investor must be patient and strategic-looking.”
Musk said he still expects to own around 20 percent of Tesla after any transaction and that he hopes all shareholders will remain owners of a private company.
The Saudi fund approached Musk months ago to discuss buying a minority stake but he initially resisted the investment, according to the same report. As a result, PIF itself decided to buy around $2 billion in Tesla shares, reportedly with the help of an investment bank.
The Saudi government is planning to turn the fund into a $2 trillion powerhouse to help diversify the oil-dependent nature of the kingdom’s economy.