(Bloomberg) – The Saudi Arabian sovereign wealth fund is in talks that could make it a major investor in Tesla as part of Elon Musk's plan to keep the electric car maker private, according to people who know about the fund's plans. 19659002] The public investment fund, which has built just under 5 percent of Tesla over the past few months, is studying how it can be involved in the potential deal, people said, who did not want to be identified. The discussions started before the controversial tweet of August 7 by Musk, who is Tesla's co-founder and chief executive officer, and said he was considering a plan to privatize the company.
The PIF sees its investment in Tesla as a strategic path for the world's largest crude oil producer to hedge against oil, people said. The Saudi fund has made no firm decisions on whether to increase its stake or how much, but the talks continue, they said. It was not immediately clear how much the fund would invest in Tesla.
Musk's tweet stunned investors, and many asked questions about his claim that funding was secured for the company. While the entrepreneur owns 20 percent of Tesla, more than $ 60 billion would be needed to buy the business from public shareholders.
The PIF and Tesla did not respond to requests for comments.
Wall Street is inundated with speculation about who could do with Musk to make a deal. Musk and his consultants are looking for a broad pool of investors to assist a potential take-private of the automaker to avoid focusing on a few new big owners, after people who are familiar with the matter. Musk said he still expects about 20 percent of Tesla after a transaction and hopes that all shareholders will own a private company.
The US Securities and Exchange Commission, which has collected information on Tesla's public announcements Concerning production targets and sales targets, the investigation of the company's public statements in the wake of Musk's Tweet has intensified, people familiar with the matter said.
Discussions about the private use of Tesla have failed so far. Masayoshi Son of Musk and SoftBank Group held talks about Tesla's private life last year, said two people who had the knowledge of the discussions. The discussions did not progress because of disagreements over ownership. The PIF is also an important supporter of SoftBank's Vision Fund.
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Saudi's current share of the company's Saudi assets is estimated at about $ 2 billion. The government plans to convert the PIF into a $ 2 trillion power plant to diversify the kingdom's oil-dependent economy.