Grab to give Anthony Tan 60.4% voting power; posted US$10.4b accumulated loss

GRAB chief executive Anthony Tan will control 60.4 per cent of the company's voting power after its merger with Altimeter Growth Corp, a US-based SPAC (special purpose acquisition company), its regulatory filing shows.

The substantial voting power granted to Mr Tan mirrors the controversial practice of "super voting" shares by some US tech companies.

According to a cap table on the filing, Mr Tan will own a 2.2 per cent stake in the company post-merger, comprising 162.9 million Class B ordinary shares. Each Class B share is entitled to 45 votes, in contrast with the one vote accorded to each Class A share.

Of Mr Tan's total stake, 122.8 million shares are under his own name, 25.6 million shares under co-founder Tan Hooi Ling and 14.4 million shares under Grab president Ming Maa. The shares of Ms Tan and Mr Maa will be beneficially owned by Mr Tan under a shareholder deed to be entered into concurrently with the merger, the filing states.

Separately, the filing also shows that Grab has recorded US$10.4 billion in accumulated losses as of end-2020. This figure ballooned from a US$8 billion accumulated loss as of end-2019, and a US$4.2 billion accumulated loss as of end-2018.

The loss figures include non-cash components, namely depreciation costs and the interest expense from redeemable convertible preference shares (RCPS) issued to investors. Between 2018 and 2020, these components added up to US$4.8 billion. Grab will not need to pay the RCPS interest expense post-listing. In 2020, Grab recorded a net loss of US$2.7 billion, on the back of US$1.2 billion in net revenue, which excludes incentives. This marked an improvement from the US$4 billion loss in 2019, with US$455 million recorded in net revenue.

Moving forward, Grab's dual-class structure is likely to draw the attention of retail investors, as other tech companies, such as Facebook, have been criticised for granting founders excessive control. According to a 2019 media report, Facebook founder Mark Zuckerberg then controlled 58 per cent of the company's voting shares. Other shareholders of the company post-merger would include the SoftBank Vision Fund, with an 18.6 per cent stake, Uber with 14.3 per cent, Didi Chuxing with 7.5 per cent and Toyota Motor Corp with 2.4 per cent. All of them would be holders of Class A ordinary shares.

At present, all directors and executive officers of Grab own 3.8 per cent of the company, with Mr Tan holding 2.6 per cent. Ms Tan and Mr Maa own 0.8 per cent and 0.4 per cent respectively.

The stakes of the other existing shareholders are SoftBank Vision Fund with 21.7 per cent; Uber with 16.6 per cent; Didi Chuxing with 8.7 per cent and Toyota with 6.9 per cent.