*Uber’s total losses for the second quarter stood at $2.6billion, of which $1.7 billion is related to the company’s equity investments and aggregate unrealised losses related to stake revaluations in Aurora, Grab and Zomato, as the firm is set to raise fresh $420million, says report

Isola Moses | ConsumerConnect

Uber is likely to sell its 7.8 percent stake in Zomato through a block deal Wednesday, August 3, 2022, in order to raise about Rs 3,300 crore ($420 million), according to a term sheet issued by BofA Securities, the sole bookrunner for the deal.

It is recalled that Zomato, January 2020, acquired Uber Eats’ India operations in a non-cash deal, following which Uber received a 9.19 percent stake in the restaurant discovery platform.

ConsumerConnect learnt as of June 30 this year, Uber had held a 7.78 percent stake in Zomato.

The proposed sale has been fixed at Rs 48-Rs 54 apiece, a discount of 2.8-13.6 percent to Tuesday’s closing price of Rs 55.55 on the National Stock Exchange, ETtech report stated.

At the lower end of the price band for the deal, the sale could fetch Rs 2,939 crore or $373 million.

Zomato’s shares reportedly surged about 20 percent Tuesday to close at Rs 55.55 on the NSE .

The stock has jumped almost 37 percent from a low of around Rs 40 July 27.

As its strategy to cut business losses, Uber said in its earnings report Tuesday that it had suffered an unrealised loss of $245 million on its investment in Zomato during the second quarter, and $707 million in the first half of 2022.

Uber’s total losses for the second quarter stood at $2.6 billion, of which $1.7 billion related to its equity investments and aggregate unrealised losses related to revaluation of its stakes in US-based self-driving tech company Aurora, Indonesian ride hailing firm Grab, and Zomato, report said.

However, is move to achieve a breakeven goal, during an investor call Tuesday, Zomato’s Chief Financial Officer Akshant Goyal disclosed the company was looking to hit adjusted Ebitda (earnings before interest, tax, depreciation, and amortisation) breakeven at a group level by the final quarter of this financial year, or latest by the second quarter of the next one (FY24).

Zomato defines adjusted Ebitda as Ebitda “less share-based payment expenses”.