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A
capital raise by Tesla has been anticipated since late last
year, gaining steam last month after Chief Executive Elon Musk
said the company could be "close to the edge" on cash needs.
Some Wall Street analysts had predicted that Tesla would seek to
raise as much as $2.5 billion in capital.
Tesla has repeatedly turned to Wall Street for fresh capital
throughout its history. It has had negative cash flow since 2014
and has posted a quarterly profit only twice since going public.
Tesla had $3.39 billion in cash and cash equivalents at the end
of 2016, but most comes from a May stock offering, cash from its
SolarCity acquisition and nearly $1 billion in draws on its
credit facilities.
Tesla's warning that it would spend $2 billion-$2.5 billion in
the first half of 2017 in capital expenditures left little
cushion at a critical time ahead of its Model 3 production,
which the company says will begin in July.
The company's shares, which are down 9 percent since a 52-week
year high in February, rose 2.1 percent to $261.11 in
after-hours trade.
Tesla said it would offer $250 million of common stock and $750
million of convertible senior notes due in 2022 in concurrent
underwritten registered public offerings.
Tesla said it would use the proceeds to "strengthen its balance
sheet and further reduce any risks associated with the rapid
scaling of its business due to the launch of Model 3, as well as
for general corporate purposes."
The Silicon Valley-based company also said Musk will participate
by purchasing $25 million of the company's stock.
(Reporting By Alexandria Sage and Ankit Ajmera in Bengaluru;
Editing by Bernard Orr)
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