Thursday 12 September 2019 3:55 pm

Uber to raise $750m from debt markets to fund purchase of Emirati rival Careem

Uber has said it will raise $750m (£608m) of debt to help finance the purchase of rival ride-hailing company Careem, the day after California passed a bill that threatens to undermine the company’s business model.

The company said the debt placement would primarily be used to raise money for its pending $3.1bn purchase of Careem.

The ride-hailing firm had announced the acquisition of Emirati-based rival Careem in March, saying at the time it expected the transaction to close in the first quarter of 2020.

Under the terms of the deal, Careem is set to become a fully-owned subsidiary of Uber, operating as an independent company and continuing to be led by Careem’s founders.

The notes would be due in 2027, Uber said in a statement.

California’s pending ‘gig economy’ legislation – called AB5 – is designed to help so-called ‘gig workers’ become employees, giving them additional rights.

Uber told reports it “strongly believed” it met the new law’s requirements for classifying workers as “contractors”, and said in a conference call yesterday it would continue campaigning for the law to be changed.

Uber’s shares were down 0.69 per cent at $33.77 by late afternoon.

Main image credit: Getty