Uber mulls selling Didi stake amid ‘little Chinese transparency’

Austin — Uber Technologies is looking to sell stakes in non-strategic assets including its holding in Beijing-based Didi Global, its CEO said on Tuesday, who also described the China market as a tough one with little transparency.

The US firm pulled out of China in 2016 after burning through more than a billion dollars a year due to a price war with Didi. It eventually sold its China operations to Didi in exchange for a stake.

Uber owns 12.8% of Didi, according to a filing in June by Didi.

“Our Didi stake we don’t believe is strategic. They’re a competitor. China is a pretty difficult environment with very little transparency,” Uber CEO Dara Khosrowshahi said.

Khosrowshahi said the company is in no rush to sell the shares. “Those kinds of stakes we look to monetise smartly over time.”

He said many of the companies in which Uber has a stake have recently gone public and are still subject to a lock-up period — when investors at the time of listing cannot sell stock — adding Uber will continue to hold some stakes for strategic reasons.

Didi did not immediately respond to a request for comment on Wednesday.

Uber shares rose 4.3% to close at $37.26 after Khosrowshahi’s remarks on Tuesday. He also said Uber last week had its best week yet in terms of companywide gross bookings at its ride-hail and food delivery operations.

But overall, ride-hail trips remained about 10% below prepandemic levels, the CEO said.

Uber had about $13.1bn tied up in investments in other companies at the end of the third quarter, including $4.1bn in Didi.

Some investors have grown concerned that Uber holding on to these investments sends a signal to the market that stakes in other companies are more attractive than putting freed-up capital into Uber’s own operations.

Uber’s operational business last quarter for the first time achieved profitability on an adjusted earnings basis, but its Didi stake drove a $2.4bn net loss in the third quarter.

Shares of Didi, which has been rattled by a probe by Chinese regulators into its data practices, are down about 53% from their June 30 initial public offering price.

Under pressure from Chinese regulators, Didi earlier this month said it will withdraw from the US stock exchange and pursue a Hong Kong listing.

Uber also holds stakes in Indian food delivery company Zomato, Southeast Asian rival Grab Holdings , self-driving company Aurora Innovation and others. Grab and Aurora are also backed by Japan’s SoftBank Group.

Reuters