Uber offers $750-mn junk bonds to help finance acquisition of Careem

John Parker - September 15, 2019

Uber Technologies Inc is selling its junk bonds in order to help finance its purchase of Careem in its 1st dept offering being a public firm. The company is seeking to issue the sum of $750mn junk bonds due in the year 2027, as per a statement released on Thursday.

The proceeds will be utilized to enable funding for its acquisition of Careem, Uber’s ride-hailing rival based in Dubai. It is the 2nd sale of bond in Uber’s decade long history while being the first one since the company went public previously this year. The company issued debt worth $2bn during its debuting offering previous October, boosting the volume of the 2-part deal because the orders swelled.

Uber is now promoting its recent offering widely to the investors. It said that it might purchase Careen next year March, denoting the biggest agreement of CEO Dara Khosrowshahi’s Uber tenure. It is expected to complete in 2020’s first quarter. It might have to extend cash for notes if the shareholders of Careem don’t elect to turn Uber stock to $55 predetermined price within ninety days of its issuance.

The bond sale is being managed by Bank of America, Morgan Stanley, Citigroup, Goldman Sachs Group,HSBC Holdings, Barclays, Royal Bank of Canada and SunTrust Banks, as per a person having knowledge on the matter.

John Parker is a finance writer and journalist based in the Outer Banks, NC.

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