Uber seeks partial sale of Didi stake to raise cash, sources say

SAN FRANCISCO • Uber Technologies is seeking to sell part of its US$6.3 billion (S$8.5 billion) stake in China's Didi Chuxing, as it begins to shed minority holdings to raise cash, according to people familiar with the matter.

The San Francisco-based ride-hailing pioneer is beginning to monetise stakes in other firms in an effort to boost its own share price, the people said, asking not to be identified because the discussions are private.

Uber shares were down about 3 per cent on Thursday in New York to US$36.41, well below the US$45 at which it went public last May.

Uber chief executive Dara Khosrowshahi is in discussions about the sale with Didi and SoftBank Group, the Japanese conglomerate that is a major shareholder in both companies, the people said.

While various scenarios are under discussion, one option is for SoftBank to team up with other investors to acquire a minority of Uber's 15 per cent stake, one person said. Didi, which needs to approve any sale, is unlikely to buy shares itself, another person said.

An Uber spokesman and Didi declined to comment.

The Didi sale would be the latest divestiture by Uber designed to consolidate operations and abandon once sprawling global ambitions.

This month, it agreed to sell its European freight business and some of its stock in Russia's Yandex.

The firm is also negotiating to sell some of its stake in Grab, Bloomberg News has reported.

Didi's valuation hit US$56 billion as ride-hailing boomed, but its shares have slid in private market transactions amid regulatory troubles and the coronavirus pandemic.

Uber wrote down its Didi stake to US$6.3 billion from US$8.2 billion in the first quarter.

The San Francisco-based ride-hailing pioneer is beginning to monetise stakes in other firms in an effort to boost its own share price, the people said, asking not to be identified because the discussions are private.

One issue may be determining the current value of those holdings.

In secondary market transactions, sellers are looking to get at least the equivalent of a US$33 billion valuation for their Didi shares, while buyers are seeking prices below that level.

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A version of this article appeared in the print edition of The Straits Times on September 19, 2020, with the headline 'Uber seeks partial sale of Didi stake to raise cash, sources say'. Print Edition | Subscribe