This is an addendum to my first comprehensive article on ComfortDelgro written here.

ComfortDelgro announced that it is acquiring 51% stake in Lion City Rental (LCR), a private hire vehicle fleet owner of Uber for a total consideration of $295 mil.

This acquisition will be funded by internal resources.

How do I look at this deal and its effect on CDG?

LCR Fleet Operation Looks a Bad Deal On Paper

CDG will take part as the majority shareholder in this venture with Uber.

This total fleet is valued at SG$642 mil. This is the net asset value.

CDG will be purchasing their share of LCR at a 10% discount to the value of SG$642 mil.

CDG have no problems funding this deal consider they are net cash and their net cash position is closer to $188 mil.

The 642 mil valuation is determined from 12,450 vehicles versus Uber’s fleet of ...