Tesla Motors on Tuesday defended its controversial plan to acquire “renewable energy” company SolarCity Corp, painting it as a financially smart move toward a more environmentally friendly future.
Combining the two companies would have “significant financial benefits,” adding more than US$500 million in cash to Tesla’s balance sheet in the three years ahead, the US company said.
Tesla forecast that SolarCity would contribute US$1 billion in revenue to the combined company next year alone.
Tesla last month said that four lawsuits have been lodged seeking to block its merger with the troubled solar panel installer.
Two of the suits filed in a Delaware court were backed by individual shareholders and the other two by pension funds representing public employees in Riviera Beach, California, and in Arkansas.
The litigation “could result in an injunction preventing the completion of the merger or a judgement resulting in the payment of damages,” Tesla said at the time.
Tesla Motors and SolarCity in June proposed a merger that Tesla says will expand the attractiveness of its car sales by creating a solution for car owners wanting a home solar system that supports their car and household energy needs.
The plan is in conjunction with a large battery factory Tesla is building
“The acquisition of SolarCity will create the world’s only integrated sustainable energy company, from energy generation to storage to transportation,” Tesla said in a release. “Energy needs to be sustainably generated, sustainable energy needs to be stored for later use, and sustainable energy needs to be used for transportation.”
Critics say the merger is in effect a bailout of a debt-laden solar-panel installer whose chairman, Elon Musk, is also the founder and main shareholder of Tesla.
Boards of both companies have agreed to the merger and are planning a general shareholders meeting on Nov. 17 to vote on the acquisition deal valued at US$2.6 billion.
Musk, who holds 21.1 percent of Tesla and 22.5 percent of SolarCity, will not be able to vote as a shareholder on the deal.
If the merger proposal is voted down, it would be a major setback for Musk’s vision of reducing climate changing emissions with a company that not only sells people electric cars, but is involved in generation and storage of solar energy that powers them.
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