Uber to appeal Singapore’s competition watchdog decision on Grab deal

Singapore’s anti-trust watchdog fined ride-hailing firms Grab and Uber a combined S$13 million ($9.5 million) over their merger deal. (Reuters)
Updated 22 October 2018
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Uber to appeal Singapore’s competition watchdog decision on Grab deal

  • ‘Our objective is not to challenge the remedies of the decision’
  • ‘we aim to clarify that the conclusion that our transaction with Grab led to a substantial lessening of competition’

SINGAPORE: Uber Technologies has decided to appeal a decision by the Singapore competition regulator that its merger with regional rival Grab violated the city-state’s competition laws, the firm said on Monday.
“Our objective is not to challenge the remedies of the decision, which are in fact almost identical to the commitments that Uber and Grab voluntarily offered to the CCCS (Competition and Consumer Commission of Singapore),” Uber said in a statement.
“Rather, we aim to clarify that the conclusion that our transaction with Grab led to a substantial lessening of competition, and that Uber intentionally breached the law, is unsupported and incorrect,” it added.
Last month, Singapore slapped ride-hailing firms Grab and Uber with fines and finalized restrictions to open up the market to competitors after concluding that their merger had driven up prices.
Uber sold its Southeast Asian business to bigger regional rival Grab in March in exchange for a 27.5 percent stake in the Singapore-based firm.


Gulf ratings untarnished by growing GRE debt

Updated 10 min 1 sec ago
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Gulf ratings untarnished by growing GRE debt

  • Head of equity research at Exotix Capital Hasnain Malik: Investors familiar with the Gulf fully expect debt issuance by governments and their related enterprises to increase
  • Hasnain Malik: The generally very strong financial position of sovereigns in the Gulf and their defensible exchange rates has provided a relative haven for global fixed income investors

LONDON: The sovereign ratings of Gulf countries remain unaffected for now by both the recent and planned debt-raising activities of government-related entities, according to S&P Global.
The agency published a research note on Tuesday following investor concerns about the implications of significant amounts of debt being raised by government-backed entities such as investment funds and oil companies.
Saudi Arabia’s Public Investment Fund (PIF) raised an $11 billion international syndicated loan in September this year, while in July, Saudi Aramco said it might consider acquiring a strategic stake in Saudi Basic Industries Corp. (Sabic) from PIF. This potential acquisition is likely to require funding of up to $70 billion, said S&P Global.
“So far, the level of GRE debt and the potential for these contingent liabilities — obligations that have the potential to materialize on a government’s balance sheet or more broadly affect its fiscal profile — being realized has not led to negative rating actions for Gulf Cooperation Council (GCC) sovereigns,” the S&P report said.
“If contingent liabilities do materialize, they have the potential to negatively affect sovereign ratings,” it added, using Mozambique as an example of where the restructuring of a government-guaranteed GRE loan led to a downgrade of the sovereign rating in 2016.
Hasnain Malik, head of equity research at Exotix Capital, said that most investors anticipated the Gulf region would ramp up debt-raising activities in the near future.
“Investors familiar with the Gulf fully expect debt issuance by governments and their related enterprises to increase. This is in line with their stated strategies,” he said.
“The more the debt that is taken on by government-related enterprises, the more that it will be lumped together with debt taken out by the sovereign in order to assess overall risk. But this is nothing new. Past discussions of the overall debt position of ‘Dubai Inc’ or ‘Qatar Inc’ have grappled with the issue of explicit and implicit government guarantees,” he said.
Rating agency Moody’s said last month that the multibillion-dollar PIF loan demonstrated that Saudi Arabia had a “strong ability to raise alternative funding in the capital markets,” according to its Oct. 17 report.
It then warned that a “significant reliance on broader public- sector borrowing to fund the diversification and development agenda would over time increase contingent liability risks for the sovereign.”
Malik said the region had retained its appeal to investors so far despite the potential rising GRE debt.
“In what has been a tougher environment for emerging market debt this year, the generally very strong financial position of sovereigns in the Gulf and their defensible exchange rates has provided a relative haven for global fixed income investors,” he said.
“The imminent inclusion into JP Morgan’s mainstream global indices of debt will likely put the region closer to the center of the average emerging market fixed income investor,” he said.
S&P Global rates 24 GREs in the Gulf region, with most of the companies enjoying the same rating as the sovereign.