Tesla also is seeking funds because it has to pay $422 million to bondholders in the current quarter, according to the filing.
Advertisement
The next tranche of funds will “used primarily for tooling, production equipment and construction of the Tesla’s Model 3 production lines”. It also showed that Tesla had considered making a merger proposal to SolarCity before the carmaker’s May stock offering of $1.4 billion and the announcement in June that meant to buy the company. Critics have chided the Musk and Tesla officials for not shutting down the function in light of the fatal crash in May, but Musk steadfastly maintained that the system was not being used properly and that the company would continue with its development program.
Tesla chief executive Elon Musk has warned the combined companies might need “a small equity capital raise” in 2017.
The company wrote in SEC filing earlier this month: “During the third quarter, we will be using substantial amounts of cash in connection with conversions of our 2018 Notes and we could pursue other actions to reduce our outstanding balance of convertible notes, which could require further outlays of cash”.
The filing also revealed that in recent weeks, 15 institutional investors passed on either acquiring SolarCity or injecting equity into it.
Shares of Tesla Motors now trade at $201.06, down 10.95 as of 2:20 PM EDT. Mr. Musk said the bond sale was a better option.
At a subsequent special meeting on February 29, the Tesla board rejected a proposal to evaluate a merger, according to the filing.
He’s also CEO of SpaceX, which today lost its second spacecraft in little more than a year due to an explosion during a test at Cape Canaveral Air Force Station Space Launch Complex 40.
Advertisement
SolarCity is now in a liquidity squeeze, as it is facing difficulties in tapping into public markets amid the merger talks. Tesla reported a net loss of $486 million through the first six months of 2016, up 78% from a year earlier.
