7:54 AM, Sep 13, 2019 — Uber (UBER), the biggest ride-hailing service in the world, said late on Thursday that it has increased the size of its debt sale by $450 million to $1.20 billion.
The San Francisco-based company, which has also priced the senior notes due 2027, said the sale was targeted at qualified institutional buyers. The offer for the notes, which will accrue interest payable semiannually at a rate of 7.5% per year, is expected to close on September 17.
Uber intends to use the proceeds primarily to fund a portion of the purchase price in connection with its pending acquisition of Careem, Inc., a ride-hailing app in the Middle East and North Africa, as well as Pakistan and Turkey.
Uber’s decision to expand the debt offer comes in the same week that saw landmark legislation pass in California state legislature. California Governor Gavin Newsom is supporting a proposed law under which certain contract workers will be reclassified as employees, hitting gig-economy firms as their costs would balloon.
The law is set to be approved in the state Assembly before the end of California’s legislative session Friday.
Wedbush analysts led by Daniel Ives said in a research note Wednesday it fully expected gig economy firms to continue to push back and find a middle ground, which Governor Newsom is also said to be seeking as he is reported to be “committed, at least, to continuing those negotiations.”
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