Riyadh – Mubasher: The state-owned Saudi Public Investment Fund (PIF) has reduced its exposure to Tesla after the US electric vehicle (EV) maker’s CEO Elon Musk said four months ago the kingdom’s sovereign investor was willing to support a management buyout stake, the Financial Times (FT) reported.
The GCC nation’s sovereign wealth fund reached out to JPMorgan Chase’s bankers to hedge its 4.9% stake in the US auto manufacturer set to be effective this month, the London-based newspaper added. .
This deal means that the PIF, which was one of Tesla’s top-five shareholders, left with little exposure if Tesla’s stock price declined.
The Saudi fund’s potential gains are also capped if the US automaker’s share rises, freezing its $2.9bn bet on the company.
The move marked souring relationships between Tesla’s CEO and the PIF overseen by the Saudi crown prince.
“I thought they had probably sold their shares. We don’t know if they own any at all,” Musk said in an email to the FT.
The PIF and JPMorgan Chase are not available for comments.
In August 2018, the Saudi PIF announced that it began discussions two years ago with Tesla’s CEO Elon Musk to express its interest in financing Tesla for going private.
Tesla’s CEO previously claimed the kingdom had been ready to back his buyout plan, which made him confident to announce he had “funding secured”.
However, the Securities and Exchange Commission charged the US firm’s chief with giving “false and misleading statements”, leading to a settlement in which Musk paid a personal fine of $20m and agreed to resign from his position.
