26 August, 2016
Elon Musk will buy United States dollars 65 million (EUR 57.6m) worth of SolarCity (NASDAQ:SCTY) bonds in the latest issuance announced by the USA solar installer.
Shares of SolarCity were gaining in late morning trading.
Tesla hopes to pair SolarCity's panels with the auto maker's in-house battery packs to capture additional renewable power.
Musk is set to buy the $65 million of bonds of the San Mateo, California-headquartered SolarCity as stated in the filing on Tuesday.
In addition, the SolarCity filing showed CEO Lyndon Rive and Chief Technology Officer Peter Rive, Musk's cousins, buying another $17.5 million each of the $124 million offer. "SolarCity is burning through a lot of cash and they need cash".
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According to data compiled by Bloomberg, Lyndon Rive is the seventh-largest shareholder in the solar company, whereas Peter Rive is the eighth-largest shareholder. Critics of the merger have lambasted it as self-dealing that bails out the struggling solar panel company and lashes together two money-losing entities. "That allows SolarCity to offer the bonds at a competitive rate for investors - 6.5 percent for 18-month bonds - and still come in lower than the cost of institutional non-asset financing".
SolarCity typically markets its so-called solar bonds to retail investors.
His privately funded space transport services and rocket-making company, Space Exploration Technologies Inc., has investments in SolarCity's bonds. When fossil fuels are consumed to make energy, they release toxic gases which are the culprit in global warming and pollution.
The SolarCity's Solar power systems harness pure and clean energy from the sunlight.
Electricity is commonly yielded from natural gas and coal.