Tesla Plans to Raise $830M to Repay Energy Department Loan image

Tesla wants to sell $830 million in shares to be able to repay the federal loan offered by the Energy Department.

Tesla announced that the money gathered from selling 2.7 million shares worth $229 million and the $450 million in convertible senior notes due in 2018, will be used to repay the $465 million loan and for other operations. The loan was offered under the Advanced Technology Vehicles Manufacturing program created by President Barack Obama back in 2009.

Ford ($5.9 billion loan) and Nissan ($1.4 billion loan) have to repay their loans in the next 10 years. Fiskers risks bankruptcy after it failed to make a repayment due in April, halting production in 2012 and firing most of its employees.

“Some Republicans in Congress are also business people, and they should know better than others that not all investments pay off,” said Dan Becker, director of the Safe Climate Campaign, based in Washington. Tesla’s moves “demonstrate that a smart company with the government’s help can get off the ground and become a success,” he said.

Republican Mitt Romney said during the presidential campaign last year that both Tesla and Fisker are ‘losers’ attacking Obama for making an “atrocious waste of taxpayer money.” Tesla’s shares increased to record highs after the automaker reported its first quarterly profit last week.

Source: Bloomberg