Uber Technologies Inc: To Undergo IPO, Seeks Loans , Acquires Nokia Digital Maps

Uber Technologies Inc. is looking into $1 billion credit line from banking institutions, a move that often signifies the start of going public.

The car-service firm Uber was reported to be talking to a number of large-sized banks inquiring how much they would be willing to give, and at what payment terms. Sources say around seven banks may join the facility.

Seeking a credit line is a signal of the early phases of IPO preparations as it supports strong relationships with financial institutions.

Uber has already ticked off a number of boxes leading to a primary public offering, like reaching $41 billion valuation in a fundraising round and a sale of convertible debts to investors. Other technology firms to reach the same milestones are Alibaba Group Holding Inc and Facebook Inc. Both companiess also looked for large credit facilities before their respective IPOs.

The credit facility, like revolver, isn't necessary to finance the firm's daily business operations.

Uber has gathered over $5 billion in equity and debt from investors in five years since it started. The truth is, it is in the stage of working on another fundraising that could make more than $5 billion value for the business. Uber may put a large amount to work in the future. The firm has bid to get Nokia Corp's digital-maps firm.

Uber had profit after computing how much they pay drivers, which is around $400 million in 2014.

The pre-IPO credit facilities intend to be in favour of firms like Uber, even when firms aren't profitable, like Twitter Inc, which only earned $1 billion in 2013, for its credit facility.

Just recently, the company launched UberEATS in downtown Toronto, collaborating with expensive restaurants such as Bar Buca for lunch deliveries. It lets customers to purchase from its app, for example, a $12 roast Tuscan pork sandwich, which Uber will deliver within 10 minutes plus a $3 handling fee.