Uber Plans To Sell 7.8 percent stake in Zomato In A Block-Deal According to a report

The deal is likely to be concluded with a margin of 2.8%-13.6 percent compared to the closing on Tuesday.

The price of $373 million for 612 million shares is most likely to be based on the lower portion of INR 48-54 price range that was set to be used for this deal as per the report.

Bank of America Securities will be the sole bookrunner on the transaction.

Although Zomato shares made it to the higher the previous day (August 2) It appears that the shares of the food giant could be heading for lower market on Wednesday.

As per Reuters, Uber is likely to conclude an agreement worth $373 million to buy its 7.8 percent stake in the food delivery firm on the 3rd of August. The deal is expected to be done with a discount of 2.8%-13.6 percent to the most recent closing price.

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Zomato’s shares Zomato gained 20 percent in the BSE to trade at the INR 55.60 on Tuesday, on the positive financial results that were better than expected from the beginning quarter of the financial years 2022-23 (FY23). Zomato’s foodtech startup nearly halved its losses on a year-to-year basis to INR 186 crore as operating revenues soared 67 percent year-on-year (YoY) in INR 1,413.9 Cr in the Q1 of FY23.

The price of $373 million for shares of 612 million is most likely to be based on the lower portion of INR 48-54 range of prices set in the agreement, as per the term sheet reviewed by Reuters.

Bank of America Securities will be the sole bookrunner on the transaction.

Zomato’s rise on Tuesday was a result of months of negative sentiment from investors regarding Zomato’s stock. The shares have been in decline for the last couple of months. Since the 24th of June on, when the company announced its the acquisition of the quick-commerce startup Blinkit and its shares have dropped nearly 21 percent between the INR 70.35 to the current price.

From a record-breaking highest in the region of INR 169.10 during November of last year, the drop in the price of shares has taken off more than 67% of worth of the capital gains of investors.

The block sale was attributable to the company’s increasing losses. In its quarterly report for Q2 CY22, Uber has reported an operating loss of $2.6 Bn, mainly because of its struggling equity investments, which accounted for $1.7 Billion of its total losses.

The challenges facing Uber have been exacerbated by the shortage of drivers and the rising costs of petrol across the world.

Uber is under constant scrutiny in India ever since a plethora of shady data was published in the Uber Files.

This is just a few days after a news report suggested possible mergers between Uber and rival Ola. In the following days, both sides have vehemently denied the claims calling the report ‘inaccurate.’

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