Uber to Raise $ 750 Million in Debt After Grubhub Deal Report

May 14, 2020 2:37 am

Beijing (PingWest)—Uber, the San Fransisco-based company, today issued a statement, announcing that it proposes to offer $750 million principal amount of Senior Notes due 2025, subject to market conditions and other factors. 

The fund will be used for general corporate purposes, which may include potential acquisitions and strategic transactions, according to the statement.

Uber was hit hard by the COVID-19 pandemic. About two weeks ago, Uber said it would lay off 3,700 employees in its customer service and recruiting departments, citing a plunge in the number of ride-sharing passengers during the coronavirus pandemic. 

Last week the ride-hailing behemoth reported that it lost $2.9 billion in the first three months of the year. CEO Dara Khosrowshahi told analysts that COVID-19 has had a dramatic impact on ridership, with trips down around 80% in its global markets last month. However, UberEats brought bright spot to the company, generating $148 million in earnings.

Uber is in talks to acquire Chicago-headquartered meal delivery company Grubhub, aiming to create one giant player in food delivery as more people turn toward those services in the coronavirus pandemic, The New York Times reported on May 12, citing people familiar with the matter.

In response, Grubhub, the NYSE-listed food delivery giant, asked for 2.15 Uber shares for each of its shares, two of the people said. That would value Grubhub’s stock at more than $60 a share, bringing the entire deal to around $6.1 billion.

However,Uber had rejected an all-stock offer, CNBC reported late Tuesday, adding that the two parties cannot agree on the price and the negotiation is still in process. Uber's board was expected to review the proposal in the "coming days," said the Wall Street Journal.