Source: Tesla Motors
quote: Tesla paid all of it back, including $26M in interest. At the time the loan was granted, Tesla was making a profit. Consider, too, that the loan was far less than what was granted to Ford and Nissan, who have yet to repay their loans. Tesla has not had a government loan since.
quote: He explained in his Seeking Alpha article that the Leverage Ratio terms prohibited Tesla’s consolidated debt from exceeding 6.5 times Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the 4th quarter of 2012, and 4.5 times EBITDA for each quarter in 2013. Because the company could not meet those standards, DOE lend-o-crats awarded a waiver in Feb. 2012 that delayed the effective dates of those ratios, but also required Tesla to set aside its loan payments ahead of time in a segregated account. A second waiver that delayed the Leverage Ratio requirement was granted on March 1, 2013, but the requirements to accelerate repayment of its loan became even more onerous as a result. “Both waivers were presented to the market as triumphs of financial engineering,” Petersen wrote, “but they were basically an up-market equivalent of a credit card issuer increasing minimum payments for a troubled cardholder.” Because, according to Petersen’s analysis, Tesla had no chance of raising 2013 earnings (EBITDA) high enough (an estimated $220 million, which Tesla would fall far short of) to cover the Leverage Ratio requirements for the year, the company would need to either renegotiate or repay the loan by the end of the year. Those facts were not disclosed in its SEC filings, nor was Musk forthcoming about the situation on a May 7 1st quarter conference call, after he was asked by a participant about the need to raise more capital. “We don’t have any plans right now to raise funding,” Musk responded. “Potentially we expect to be – we were positive cash flow in Q1 and we expect to be there relatively sort of neutral on cash flow in Q2. But if it was possible, we could be optimistic about raising a round, but we have spent no time on that at all.” But only eight days later Tesla announced a $1 billion public offering backed by heavy hitters Goldman Sachs, JP Morgan and Morgan Stanley, which enabled the payback of the $465 million DOE loan and “shore(d) up a dismally feeble balance sheet that had $124.7 million of equity and a $14.2 million working capital deficit on December 31, 2012,” Petersen wrote.
quote: Reclaimer's argument is that Tesla exists due to government funding. That's not entirely true, and I pointed this out in my post.
quote: No one said Tesla is financially healthy TODAY.
quote: Reclaimer's argument is that Tesla exists due to government funding.
quote: They're conservative groups, and Heartland in particular is critical of government spending, so I wouldn't expect objective analysis from either.
quote: It DID pay back the loan, because it COULD, and this was accounted for in its loan terms.
quote: People ARE saying that...
quote: Tesla is the company it is today because of the Government loan. The massive tax subsidies, and of course the California carbon credit scam designed to prop them up at the cost of other automakers.Now I'm not saying Tesla wouldn't be around today without those things, but it's hard argue they've been essentially crutched by the American taxpayer every step of the way.
quote: They borrowed from Peter to pay Paul, as the saying goes. Musk's bookkeeping is borderline criminal. His non-GAAP numbers nonsense. Tesla is a bubble waiting to burst.
quote: why would Telsa want to payoff a loan with an interest rate of 1.6%?
quote: A quick google search reveals the Ford and Nissan interest rate is 5%
quote: Other then the fact the industry was willing to give Tesla a loan at 1.5%?
quote: That's not what happened.
quote: However, 1.6% is VERY cheap money, and doing an offering to because the company is likely to default on the loan is remarkable
quote: As for Telsa making money... according to Dec 2013 filing,EBITDA is negative 38.5 million. It's hard to invest negative profits. Considering the recent talk of plant investment, one can conclude more outside cash will be needed at some point....or maybe the DOE can give them another loan!