By Anshuman Daga
SINGAPORE (Reuters) – Southeast Asian ride-hailing and food delivery giant Grab has raised $2 billion from its first term loan, in what it said was the largest institutional debt in Asia’s technology sector, as the company expands its regional services.
The five-year senior secured loan was upsized from the initial $750 million after the company secured commitments from international institutional investors, Singapore-based Grab said in a statement on Monday.
Anthony Tan, group CEO & co-founder of Grab said that investors recognised the value of Grab’s super app platform, as “we continue making consistent progress in achieving our growth and sustainability milestones.”
Backed by investors including Softbank Group Corp, Grab has evolved from a ride-hailing app operator to a one-stop shop for services such as food delivery, payments and insurance in Southeast Asia, home to about 650 million people.
The loan will be used for general corporate purposes and will allow Grab to diversify its finances. Grab said the interest rate on the loan was lowered by 100 basis points from the original launch guidance to 450 basis points over LIBOR.
Grab’s food business, which has benefited from a sector-wide boom in food delivery as countries imposed lockdowns, accounts for more than 50% of its revenue. Grab expects its food delivery business to breakeven by the end of 2021.
JPMorgan was the lead bookrunner on the loan facility, while Barclays, Deutsche Bank, HSBC, Mizuho, MUFG and Standard Chartered were the joint bookrunners.
(Reporting by Anshuman Daga; Editing by Ana Nicolaci da Costa)