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Uber to Sell 7.8 Percent Stake in Zomato

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According to reports, Uber Technologies is likely to sell its 7.8 percent stake in online food ordering platform Zomato through a block deal to raise up to Rs. 3,300 crore ($420 million).

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

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

In January 2020, Zomato acquired Uber Eats' India operations in a non-cash deal, following which Uber received about 10 percent stake in the restaurant discovery platform.

As of June 30, Uber Technologies held a 7.78 percent stake in Zomato.

Zomato’s shares surged about 20 percent to close at Rs 55.60 on the BSE. Its stock has jumped 37 percent from a low of Rs 40.55 on the BSE on July 27.

I would say that change is always slow and then it is actually fast. You don't wake up one day and say now I want to change and then change happens overnight

According to Uber , its earnings report that it had suffered an unrealized loss of $245 million during the second quarter and $707 million in the first half of 2022, on its investment in Zomato.

Akshant Goyal, chief financial officer Zomato says, “the company had an internal milestone to hit adjusted Ebitda (earnings before interest, tax, depreciation, and amortisation) level breakeven at a group level by the final quarter of the ongoing financial year, or latest by the second quarter of the next financial year (FY24).”

Goyal says, “I would say that change is always slow and then it is actually fast. You don't wake up one day and say now I want to change and then change happens overnight. So, I think over the last year, we have been really prepping and working hard to set up the infrastructure to make this change happen. This quarter is when all of those things actually started to happen.”

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