Tesla boosts stock, note offering nearly 17 pct.

Citing high demand, Tesla increases stock and note offering by nearly 17 percent

Associated Press

PALO ALTO, Calif. (AP) -- Electric car maker Tesla Motors Inc. has increased the size of its stock and note sales by almost 17 percent, citing high demand from investors.

The Palo Alto, Calif., company said in a regulatory filing on Friday that is now expects to gross $968 million from the sales, which will take place on May 22. Earlier in the week, the company said it expected to gross $830 million.

Tesla said in the filing with the U.S. Securities and Exchange Commission that it will use $452.4 million from the stock and note sales to prepay a loan it received from the U.S. Department of Energy. Tesla CEO Elon Musk has promised to pay off the $465 million, 10-year loan early. The company plans to use the rest of the proceeds for costs related to its debt sale and general corporate purposes, the filing said.

Tesla's shares have soared since last week, when it reported its first-ever profitable quarter since it was founded in 2003. Musk has said he expects the company, which went public in 2011, will prove profitable this year on growing sales of its Model S sedan. Tesla's stock value has jumped nearly 65 percent this month alone.

Tesla now plans to sell 3.39 million shares in a public offering, and has priced the stock at $92.24 each, according to the filing with the SEC. The company also said it would pay 1.5 percent interest annually on $600 million in senior convertible notes that it plans to sell. The notes come due on June 1, 2018.

The size of both offerings increased from the company's plans on Wednesday, and a spokeswoman said Friday that it was due to the success of the offerings. Tesla had intended to sell 2.7 million shares of stock and $450 million in senior notes.

The stock offering price was just under Thursday's closing price of $92.25. Tesla shares slipped 27 cents to $91.98 in trading early Friday.

The banks managing the stock and debt offerings have options to buy another 509,000 shares of stock to resell, raising an additional $46.4 million, and another $60 million in notes.

Musk plans to buy just over a million of the stock shares for $100 million. About $45 million will be purchased in the offering and $55 million will be purchased directly from Tesla. He currently holds about 27 million shares, nearly 24 percent of the company's outstanding stock.

Tesla has enjoyed some acclaim for its Model S, which went on sale last summer. It is preparing for the 2014 debut of its second vehicle, the Model X SUV. Tesla also made a major engineering hire earlier this month from Aston Martin.

While investors are bullish on Tesla, it still faces a huge obstacle: The lack of an electric vehicle infrastructure on U.S. roads. It has built a number of supercharging stations and plans to add to that in coming years.

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