Electric-car maker Tesla Motors Inc. is scheduling its initial public offering to trade June 29 and hopes to raise as much as $178 million through the deal.
The Palo Alto, Calif., company, which makes a luxury all-electric car that sells for $109,000, plans to sell 11.1 million shares between $14 and $16 a share. It has applied to list on the Nasdaq under the symbol TSLA.
Although Tesla has never been profitable and had sold only 1,063 of its Roadster models as of March 31, the company’s offering has drawn the attention of green energy investors and high-end car buffs alike. The vehicles can accelerate to 60 miles an hour in about four seconds and are based on a model made by Lotus, the British luxury sports car maker.
But this stands out:
Tesla plans to spend $42 million to purchase the former New United Motor Manufacturing Inc. plant in Fremont, Calif., a few months after the IPO. The plant is owned by Toyota and Motors Liquidation Co., which is the remains of the former General Motors Corp. that is in bankruptcy.
As a condition of Tesla’s $465 million loan facility from the U.S. Department of Energy, 50% of the proceeds from the IPO must be set aside in an account to pay for capital expenses related to building the Model S, which would include purchasing the plant. The DOE loan can be used to reimburse Tesla for the costs.
Good news. The government is forcing Tesla to use shareholder money to buy a factory, but then will pay back the shareholders with taxpayer money.
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