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Uber seeking billion-dollar loan

Uber has confirmed that it is looking to secure a $1.25bn (£900m) leveraged loan, less than a month after revealing that its losses ballooned to $4.5bn last year.

The ride-hailing company is thought to be contacting loan investors directly over the financing, which was first reported by Bloomberg, with Uber expected to meet with investors on Friday.

By choosing to raise funds through debt rather than equity, this will mean Uber's existing shareholder base will not be diluted.

It comes just over a year and a half after Uber last tapped the leverage loan market, when it raised $1.15bn, with those funds having been used to help Uber expand globally, as well as invest further in research and development.

Last month, the company said its sales had increased 61pc in 2017, hitting $7.5bn, but its losses widened to $4.5bn from $2.8bn in 2016 due to heavy writedowns and legal expenses.

Uber does not have to report earnings, as it is not a publicly-listed company, but chooses to do so.

The search for loan investors is likely to attract a lot of interest, given Uber received a $48bn valuation late last year on an investment led by Softbank Group.

The move, which saw Softbank take a 15pc stake in Uber and become its largest shareholder, was seen to provide a much-needed boost to the ride-hailing firm, which has faced a series of road-bumps over the past year, including being stripped of its licence to operate in London

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IDFIMH

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Taxis Are Public Transport too

Join the campaign to get April fools jokes banned for 364 days a year !

The fallout would be minor, and one to celebrate.

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IDFIMH

Do you actually believe our Government would underwrite a company that is not fit and proper to hold a license or is overseas owned.

Doubt that - remember the dot-com bubble? When it burst it knocked $5 TRILLION off the value of the companies involved, most in the US, and I can't remember the government doing very much. Uber is chickenfeed compared to that. It does look very dot-commish though, but some companies like eBay and Amazon managed to come through the dot-com collapse.

Difference with the likes of RBS being "too big to fail" is that the banks run the money system, so if they had gone under the cash machines would have dried up pretty quickly and the whole economy would have felt the blow. Many businesses in unrelated sectors would probably have gone under as a consequence and everyone would have found it very difficult to cope. I mean, look at the damage the crisis did to the economy even when the government stepped in to bail the banks out.

Uber collapsing wouldn't be nearly so bad for the economy in general. Of course, there would be wider repercussions, but nothing like the collapse of a major bank.

The ramifications of Carillion's collapse in the UK are no doubt a lot more catastrophic for the economy than if Uber went under, but it was just left to go into liquidation.