Uber CEO tackles challenges with board battle, London regulator
02:22 am
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Modi government's performance a mixed story: Ex RBI GovernorUber Technologies Inc Chief Executive Dara Khosrowshahi, little more than a month on the job, on Tuesday addresses two big challenges - London`s threat to ban the ride-hailing service and a board battle over the influence of co-founder Travis Kalanick and investment by Japan`s SoftBank.
Khosrowshahi tweeted that he was "determined to make things right in this great city!" after meeting regulator Transport for London, which last month said it would strip Uber`s[UBER.UL] license, calling it "unfit" to run a taxi service. Both sides described the meeting as "constructive" and did not offer details.
Khosrowshahi was due to phone into a board meeting in San Francisco to promote proposals that proponents believe would improve corporate governance. These would pave the way for an expected initial public offering and support from major new investors - SoftBank Group Corp and growth-oriented Dragoneer Investment Group.
The company is seeking to shore up its reputation after a series of scandals and to move beyond a battle between Kalanick and Uber investors spearheaded by Silicon Valley`s Benchmark Capital. Benchmark led a board revolt to oust Kalanick as chief executive officer, and directors are divided about what role Kalanick now should play.
The changes are grouped into two proposals from Khosrowshahi, and backers believe that both will pass, two people familiar with the matter said.
Kalanick, still one of the largest shareholders and a board member, contends that fellow Uber board members are moving too fast on a dramatic restructuring and wants to delay a decision on governance changes, a third person said.
The first proposal would cut the number of board seats controlled by Kalanick to one from three, increase seats effectively controlled by Khosrowshahi to five from one and eliminate supervoting rights, which give early shareholders multiple votes per share, two of the sources said.
Other provisions up for debate could set a deadline for an initial public offering and increase the size of Uber`s board by two members to 13, one source added.
A second proposal would allow internet firm SoftBank and Dragoneer to invest around $10 billion in Uber, two of the people familiar with the matter said.
That would include about $1 billion in new Uber shares at the current $68 billion valuation, with the rest earmarked for buying shares from current investors at a discount, the sources said. It was not clear how many shares current investors and employees would sell at the terms discussed, but approval of the plan on Tuesday would set in motion discussions with shareholders over the coming weeks.
Kalanick responded to Khosrowshahi`s proposals on Friday by appointing former Xerox Chief Executive Officer Ursula Burns and former Merrill Lynch Chief Executive Officer John Thain to fill two open director seats, and they are joining the Tuesday meeting.
Still, if the changes in voting control pass, the company could face legal roadblocks.
Shareholder Benchmark has challenged Kalanick`s ability to appoint directors, and investors led by venture capitalist Shervin Pishevar threatened on Monday to sue directors who voted for the plan, including Kalanick. Though unlikely to make all the concessions sought by fellow board members, Kalanick has shown willingness to cut supervoting rights in the name of strengthening governance, one of the sources said.
Goldman Sachs, acting as a financial adviser to Uber`s board, has been working for weeks since an initial agreement with SoftBank to amass support for the transaction and governance changes, according to another source.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
