Tesla Motors Inc (NASDAQ:TSLA) posted a press release with more information about its plans for the gigafactory. The company also said it will do a $1.6 billion convertible note offering to help pay for the facility.
Tesla posts convertible note offering
The offering will be done in an underwritten registered public offering. Tesla Motors Inc (NASDAQ:TSLA) said it would offer $800 million of the aggregate principal of convertible senior notes to be due in 2019 and the other $800 million to be due in 2021. The automaker also said it would grant the underwriters a 30-day option to buy up to $120 million more in aggregate principal amount of convertible senior notes due in 2019 and $120 million more due 2021. That brings the total potential offering up to $1.84 billion.
The 2019 notes will be convertible into cash, shares of Tesla Motors Inc (NASDAQ:TSLA) or a combination, at the automaker’s election. The 2021 notes will also be convertible into cash, Tesla shares or a combination, “subject to Tesla’s right to deliver cash in lieu of such shares of common stock. The automaker said the interest and conversion rates and other terms have yet to be determined.
Tesla Motors Inc (NASDAQ:TSLA) said it would use the net proceeds from the offering to speed up its U.S. and international expansion, develop and produce the Generation III vehicle, develop the Gigafactory and “other general corporate purposes.”
In addition to the convertible note offering, Tesla Motors Inc (NASDAQ:TSLA) said it would enter into “hedge transactions and warrant transactions, which are generally expected to prevent dilution unp to approximately 100% over the common stock price at the time of pricing of the notes due 2019 and 120% over the common stock price at the time of pricing of the notes due 2021.”
Tesla tells more about the gigafactory
In a regulatory filing today, Tesla Motors Inc (NASDAQ:TSLA) also revealed some more details about its plans for the gigafactory. It is currently seeking sites of between 500 acres and 1,000 acres in Arizona, New Mexico and Texas. It estimates that building the facility could cost up to %5 billion. Tesla plans to open the factory in 2017 and create 6,500 jobs. The plant would reach full capacity by 2020.
Tesla Motors Inc (NASDAQ:TSLA) said the gigafactory will cut its battery cell costs more quickly “than the status quo and, by 2020, produce more lithium ion batteries annually than were produced worldwide in 2013.”
We still don’t know which companies might partner with Tesla Motors Inc (NASDAQ:TSLA) on the gigafactory, as those details are likely still being worked out.