Norway’s sovereign fund reticent on Tesla going private

Country’s $1 trillion fund owned 0.48 per cent of Tesla at end of 2017

Tesla CEO Elon Musk’s tweeted earlier this month that he intended to take the electric car maker private.

Tesla CEO Elon Musk’s tweeted earlier this month that he intended to take the electric car maker private.

 

There are plenty of opinions on whether Tesla should (or even can) go private, but Norway’s sovereign wealth fund, the world’s biggest, isn’t chiming in.

“We don’t have a view on that,” Trond Grande, the fund’s deputy chief executive officer, said in an interview on Tuesday.

He then added: “We want to be invested in companies that make money.”

Tesla CEO Elon Musk’s tweeted earlier this month that he intended to take the electric car maker off the stock exchange has been followed by questions from investors on his capacity to fund such a deal. Mr Musk’s surprise announcement – which he’s since admitted no one had reviewed before he published it – was the last incident in a pattern of unorthodox communication from the CEO and chairman which has rocked the company’s stock and raised doubts over his ability to run the business.

That issue has compounded other challenges for the car maker, which is burning through cash as it struggles to deliver new models from its facilities and faces servicing lines in one of its biggest markets – Norway.

A 2018 Tesla Model X electric car.
A 2018 Tesla Model X electric car.

That country’s $1 trillion fund owned 0.48 per cent of Tesla at the end of 2017, according to holdings published on its website once a year.

Asked whether the fund, which has a much longer horizon than most investors, views that particular holding as more challenging than others or whether it could be an opportunity, given its ability to sit through large fluctuations, Grande said it was neither.

“We’ve said several times what we view as good corporate governance, in terms of role distribution between CEO and chairman, the possibility to vote at general assemblies, that type of thing,” he said. “Some companies are in an early development phase and won’t have matured as much on all these questions.”

The fund could also not play a part in a taking-private deal, since it’s barred from investing in private equity.

- Bloomberg

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