Tesla Motors and Solar City are facing a cash squeeze ahead of their merger, and Tesla said it will seek to raise up to $2.89 billion in capital through a stock sale in connection with the transaction.
In a new filing with the Securities and Exchange Commission, Tesla said bondholders have said they are seeking payments of $422 million for convertible notes that are due in 2018.
Palo Alto-based Tesla said those payments to the bondholders would be made by the end of the third quarter, which is due to end on Sept. 30, the SEC filing shows.
“Tesla is currently planning to raise additional funds by the end of this year, including through potential equity or debt offerings,” the company said in a filing with the SEC this week.
Separately, SolarCity appears to be going through cash at a rapid pace.
At the end of June, Solar City had $145.7 million in cash on hand, according to documents filed with the SEC. That’s quite a drop from the $382.5 million in cash the company had at the end of December.
During the 12 months that ended in June, Tesla lost $1.13 billion on $4.57 billion in revenue. Over the same one-year period, SolarCity lost $94.9 million on $537.7 million in revenue.
The maker of electric vehicles said it has a number of proposed uses for the cash.
“Such additional funds would be used primarily for tooling, production equipment and construction of the Tesla’s Model 3 production lines, equipment to support cell production at Tesla’s Gigafactory, as well as new Tesla retail locations, service centers and supercharger locations,” Tesla said.
But some of the cash could be used in connection with the combination of the two green tech companies.
“If the merger with SolarCity is completed, the additional funds would also be used to support the additional capital needs of the combined company,” Tesla said in the filing.
Photo: Interior of a Tesla vehicle. (Getty Images)
The post Tesla, Solar City in cash crunch ahead of merger appeared first on SiliconBeat.
