American car maker Tesla Motors, is planning to raise funds to counter a severe cash crunch.
Part of the money raised will be used for the development and production of its new Model 3 sedan along with the construction of its massive Gigafactory battery production facility. The rest will be used to help fund Tesla's takeover of SolarCity.
Earlier this month, Tesla had said that it closed the second quarter with nearly $3.25 billion in cash. However, the company repaid $678 million on a revolving credit line in July. Tesla planned to redeem $422 million in convertible notes.
The debt payment and the redemption of the convertible notes cut down Telsa's cash reserves down to $2.15 billion.
However, with the company already planning to spend $1.75 billion in the second half on factories and equipment and its purchase of SolarCity for $2.6 billion, the fresh cash infusion is something that is needed to help the company concentrate on its plans for the future.
Tesla's immediate future will see the company concentrate on developing the final production version of its Model 3 which has received over 400,000 orders after it was unveiled earlier this year. Tesla's Gigafactory is also set to start production of batteries this year.