BERLIN (Reuters) – German e-commerce investor Rocket Internet (RKET.DE) won shareholder approval on Tuesday to raise as much as 4.5 billion euros ($5 billion) in the next five years to invest in new ventures and increase stakes in its existing start-ups.
Europe’s largest Internet company, founded in 2007, is viewed as a potential launch pad for future stock market listings of everything from online fashion to home furnishings and personal finance.
It already has holdings in more than 100 start-ups and has big expansion plans for which it needs more cash.
The Berlin group raised 1.4 billion euros in a stock market listing in October and then just four months later tapped investors for 588 million.
The amount of capital it can now raise is equivalent to more than two thirds of its current market capitalization of around 6.4 billion euros.
Its voracious appetite for cash to fund its far-flung business investments sent its shares down to their recent lows.
They currently trade more than 10 percent below the level where its initial public offering was priced in early October last year. They were down 3.6 percent by 9.06 a.m EDT, underperforming a broadly firmer German market.
At its first annual general meeting on Tuesday, Rocket asked shareholders for permission for a possible capital increase in the next five years of more than 2.5 billion euros based on its current share price.
The company also sought approval to issue a convertible bond of up to 2 billion euros by June 2020.
The two proposals were backed by 89 percent of shareholders represented at the meeting.
Chief Financial Officer Peter Kimpel said any new capital would be used to invest in new companies, increase stakes in existing companies, build the technology platform and make acquisitions.
So far Rocket has ploughed the bulk of the money it has raised into investments in online takeaway food and grocery delivery start-ups that it says has created the largest takeout food delivery network outside China.
Chief Executive Oliver Samwer said Rocket Internet’s focus on emerging markets should provide encouraging prospects.
“Growth won’t slow, even after 20 years of the Internet. It’s just starting,” said Samwer, who has created and sold a string of Internet companies since the peak of the dot-com era in the late 1990s. “Growth is particularly strong in our markets because they are undeveloped.”
[“source – yahoo.com”]