Home / Articles / Tesla set to raise $1.8bn in bond offering

Tesla set to raise $1.8bn in bond offering

Tesla expects to raise nearly $1.8bn (£1.4bn) by selling “junk” bonds to private investors – even more than the electric car-maker aimed for when it announced the offering this month.The firm said the money will keep its balance sheet steady as it ramps up manufacturing of its newest car.Tesla aims to make 5,000 of its mass market Model 3 a week by the end of this year. It has estimated it is already spending about $100m a week to hit that target.On 4 August Tesla said was looking to raise $1.5bn by selling bonds, but said on Friday it now expected to raise $1.77bn from the sale.The fundraising is limited to major institutions and not private investors. Analysts said Tesla’s ability to raise more than $1.5bn indicated an appetite for risk among investors, as low interest rates have limited returns in many other types of investments. High stock market valuations have also made it harder to make a profit.”Without the proceeds from the note offering, Tesla’s liquidity position would be stressed,” analysts at Moody’s said, warning of risks to potential investors.Tesla had about $3bn in cash at the end of June, but it spent more than $2bn in the most recent quarter.The company founded by Elon Musk has frequently turned to investors to overcome persistent operating losses. Tesla plans to eventually make more than 500,000 of the new Model 3 cars a year at its Fremont factory – or about 10,000 per week.Moody’s said the target was ambitious given the relatively small size of the US electric car market.
Source: BBC News

About Business Ideas UK

My name is Joel Bissitt. I have been an entrepreneur for 24 years and have run many small businesses across various sectors. For the last 10 years I have worked mainly within online media, franchising and small business start-ups. I am an author of various websites including Franchise UK https://www.franchise-uk.co.uk

Check Also

Hammond to back help for 'scale-up' champions

The Chancellor will give his backing next week for a multibillion-pound support package aimed …

Free Franchise Guide

Free Franchising Guide

 

Interested in buying a franchise? The our FREE Franchise Guide is a must! The guide contains lots of information to help you decide if franchising is right for you.

 

To claim your Free Franchise Guide click here