*DJ S&PGRBulletin: Sale Of Uber Eats India Narrows Uber's Losses

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January 22, 2020 10:32 ET (15:32 GMT)

Press Release: S&PGRBulletin: Sale Of Uber Eats India Narrows Uber's Losses

The following is a press release from S&P Global Ratings:

SAN FRANCISCO (S&P Global Ratings) Jan. 22, 2020--S&P Global Ratings said Uber
Technologies Inc.'s sale of its Uber Eats India business to Zomato Media
Private Ltd. is a modest credit positive, given that it narrows the company's
losses and contributes to its goal of having positive EBITDA in 2021. However,
the sale does not affect the rating because Uber has more work to do to
achieve that ambitious goal, and there is uncertainty about how California's
law to more tightly regulate the classification of workers as contractors,
known as AB5, will affect Uber's business. In order to for us to raise the
issuer credit rating, Uber must generate enough profit from its ride-sharing
business to cover its unallocated corporate expenses and absorb an adverse AB5
outcome, show continued progress on narrowing Eats losses, and maintain robust
liquidity. If Uber demonstrates progress toward achieving positive EBITDA in
2021, it would likely satisfy our upside scenario.

Uber disclosed that for the year-to-date period through September 2019, Uber
Eats India had an EBITDA loss of $235 million, which we think suggests that
for the past 12 months, its EBITDA loss was in the low- to mid-$300 million
range. This compares to S&P Global Ratings' adjusted EBITDA loss of $3.3
billion and unadjusted negative free cash flow of $3.6 billion for the 12
months ending in September, so the move is a step toward profitability but by
no means a key driver, especially considering that Uber intends to reinvest
some of the savings. Uber will receive stock consideration, which will give it
an effective 9.99% ownership in Zomato, and $35 million for the reimbursement
of goods and services tax. In addition to its actions in China, Russia, and
Southeast Asia, as well as its auto leasing business, this transaction further
demonstrates Uber's willingness to exit businesses with weak prospects for
market leadership.

This report does not constitute a rating action.

Primary Credit Analyst: Christian Frank, San Francisco + 1 (415) 371 5069;
christian.frank@spglobal.com
Secondary Contact: David T Tsui, CFA, CPA, San Francisco (1) 212-438-2138;
david.tsui@spglobal.com


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January 22, 2020 10:32 ET (15:32 GMT)