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Your Weekly Commercial Awareness Update – w/c 15th October 2018

Your Weekly Commercial Awareness Update – w/c 15th October 2018

Here are this week’s headlines, brought to you by our Student Commercial Awareness Team:

Uber Raises $2bn Ahead of Expected IPO in 2019

Reported by Lee Rui Ci 

Ride-hailing company Uber has raised $2bn in its debut bond sale to meet high demand from investors and to fund the company’s cash-intensive growth. This news comes as Uber is preparing for an initial public offering expected to happen in 2019.

The bond sale was led by Morgan Stanley in a private placement, that is the selling of bonds to a select number of private investors instead of any type of investor in the open market. To date, Uber remains unprofitable as the company has a heavy cash burn. The company ended the second quarter of 2018 with a net loss of $891m and a net revenue of $2.8bn. Chief Executive Dara Khosrowshahi predicts that this will continue for some time as the company continues to invest in new ventures such as driverless cars, bike and scooter sharing, and deliveries. On a separate but related note, Uber is also considering selling minority stakes in its self-driving car unit, Advanced Technologies Group, to ease the company’s financial pressure. The unit spends at least $500m in cash per year.

The fund raised from the bond sale will provide the company with additional cash in the short term while Uber prepares for its initial public offering (IPO) which is expected to take place in 2019. An IPO is when a private company raises investment capital by offering shares to the public for the first time. The targeted valuation of the IPO is $100bn, which may possibly be the biggest IPO in the US technology sector in years. Morgan Stanley and Goldman Sachs are set to be the lead underwriters for the IPO.

See the Financial Times for more.

Strong Summer of Retail Sales Comes to an Abrupt End

Reported by Radhika Morally 

Rising sales in July and August, attributed to the summer heatwave, meant that retail sales experienced a continuous rise in activity. However, the Office for National Statistics (ONS) have reported a drop of 0.8% in retail sales during the month of September, worse than the 0.4% anticipated by City of London analysts.

Retail sales are significant to the UK economy, accounting for about one third of all consumer spending. A decline of such a large degree has not been seen in the food sector since October 2015, and arguably reflects the more restrained attitude of the nation after the increased spending over summer.

However, specialists say that this fall was not in fact unprecedented. Samuel Tombs, the UK economist at Pantheon, has said that ‘retail sales were always likely to retreat in September following the weather-related surge over the summer’, particularly since the increased retail sales were so highly attributed to food sales.

Still, such a fall only serves to emphasise the current fragility of the UK retail market. Ben Brettell of Hargreaves Lansdown states: ‘Where we go from here is highly uncertain.’ He acknowledges that although Brexit is damaging consumer confidence, continued wage growth is providing consumers with more spending power. Whether or not they decide to use it is yet to be seen.

For more information, see The Guardian, The Independent and Sky News.

6 Year-Old Boy Wins the Right to Sue for his Father’s Death

Reported by Jutha Cheewat

In 2012, Lex Warner died while diving off the Scottish coast. His son who was less than a year old then was fighting for the right to sue the involved ship-chartering company for negligence.

The Scottish court decided that it was too late for such claim referring to the 1974 Athens convention. According to the Guardian, the convention limits any claim involving “carriage of passengers and their luggage by sea” up to two years after they disembarked.

Vincent Warner, Lex’s six years old son, went to the Supreme Court, arguing whether he has the right to sue. The court ruled in his favour on Wednesday.

Lord Hodge, who delivered the judgment, said that “in my view, the words in article 16(3) of the Athens convention … are sufficiently wide to cover domestic rules which postpone the start of a limitation period, as well as those which stop the clock after the limitation period has begun […] In agreement with [Scotland’s] inner house, I conclude that Mrs Warner’s claim as Vincent’s guardian is not time-barred by the Athens convention.”

The court recognised that there are questions that need to be answered especially in relation to the deceased’s injury prior to the diving. Therefore, the case must go to court.

Read more here.

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