Uber gives the green light for sale of stake to SoftBank

In a senior level departure from ride-hailing firm Uber, Shweta Rajpal Kohli, Head of Public Policy for India and South Asia has resigned from the company. The statement added that it has entered into a potential investment deal and that it will use the funds to fuel its investments in technology, expansion in the U.S. and overseas, and will allow Uber to strengthen its corporate governance.

Over the weekend, Uber had confirmed that it has closed an investment deal with Softbank Group and Dragoneer Investment group.

The Japanese group, founded by billionaire Masayoshi Son, expressed an interest several months ago in investing around $1 billion in Uber for a stake of at least 14 percent.

SoftBank shares were down 0.75 percent on the news with Makoto Sengoku, market analyst at Tokai Tokyo Research Centre, saying that investors were underwhelmed with the news.

SoftBank and Dragoneer are leading a consortium that plans to invest $1 billion to $1.25 billion in Uber, the most highly valued venture-backed company in the world, along with a purchase of up to 17 per cent of existing shares in a secondary transaction.

"Upon closing, it will help fuel our investments in technology and our continued expansion at home and overseas, while strengthening our corporate governance", Uber said in a statement. During that process, a price will be set for the existing Uber shares.

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A spokeswoman for Benchmark did not immediately respond to Reuters' request for comment, while a spokesman for Kalanick declined to comment. Investment firm Benchmark Capital was an early Uber investor but sued Uber founder and former CEO Travis Kalanick.

"The Uber board and its shareholders, as well as the SoftBank Group side, have come to a basic agreement on a process for the SoftBank Group to make a future investment in Uber".

The Benchmark-Kalanick lawsuit is almost dead, but this isn't a clear victory for Uber's ex-CEO. Kalanick has control over two seats beyond his own.

© 2017 San Jose Mercury News under contract with NewsEdge/Acquire Media.

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