Ride-hailing firm Uber are seeking more than originally first thought via the leveraged loan market. The decision comes just one day after the minicab chose to suspend further autonomous car rides following the fatality of a pedestrian.
Following a record year of losses private hire firm Uber had confirmed that they were seeking a £900m leveraged loan. However, this is now likely to be closer to £1.07bn.
Despite the death of a pedestrian caused by a driverless Uber vehicle interest from
loan investors is expected to remain high due to the lure of a high yeald return.
The much maligned car-hailing service saw annual losses jump from £2bn to £3.2bn following several high profile legal cases and a loss in its market value. According to Bloomberg sources Uber are trying to push for a loan by contacting leverage investors directly. A leveraged loan is usually extended to companies that already have large amounts of debt. Lenders consider leveraged loans to carry a higher risk of default, and as a result, a leveraged loan is likely to be more costly to Uber. However, by selecting to increase their debt rather than equity, this means existing Uber shareholders won’t see their holdings diluted. This isn’t the first time Uber have taken out a sizeable loan. In 2016 the firm raised around £830m from leveraged loan investors to aid its global growth.