Uber said Thursday (Sept. 12) that it will tap $750 million in debt financing to help fund its $3.1 billion buy of Careem, a ride hailing company that is based in the Middle East.
As reported by Yahoo Finance, the financing will be done through a private placement (known as a 144A), and the notes will be due in 2027.
The acquisition was announced in March and affords Uber the chance to obtain a rival based in Dubai. Careem, for its part, said in July it had concluded operations in Sudan in light of the Uber acquisition. The firm started its Sudan operations in September 2018 following the lifting of economic sanctions by the United States in 2017.
“There are no plans to close any other markets, and ceasing Sudan operations will not have any effect on Careem’s other markets,” a spokesperson said in a statement.
The Financial Times said “how the placement is priced could be seen as a test of Uber’s credibility with bond investors” amid a high profile decline in the company’s common stock that debuted in May.
The placement also comes in the wake of news that in California, a law has been passed that could change what is traditionally billed as an “asset lite” model.
The bill challenges the very definition of contractors in the gig economy and could lead to some workers being reclassified as employees. The bill puts the burden of proof on the employer and requires that companies classifying workers as contractors prove it based on new criteria.
Uber, Lyft and DoorDash are planning to spend $90 million to bolster a ballot initiative that would make them exempt.
Uber is going a step further and has pledged it will fight the legislation and litigate misclassification claims from drivers.
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