BERLIN (dpa-AFX) - Food delivery service Delivery Hero has raised fresh capital by issuing new convertible bonds to institutional investors. The targeted gross proceeds of one billion euros were achieved, the MDax-listed company announced late Monday evening in Berlin. The papers run until February 2030. Because of the expected dilution of the number of all shares, Delivery Hero share certificates slid on Tuesday morning last by a good 4 percent to 42.36 euros.

With the price slide the recent downward trend continues since the intermediate high of 57.82 euros at the beginning of February, until which the value of the papers had almost doubled starting from the October low. The 40-euro mark, which had repeatedly provided support in November and December, could now come into view.

According to the information provided, the convertible bonds were issued to institutional investors in a private placement excluding shareholders' subscription rights. They can initially be converted into a good 17 million new or existing shares, Delivery Hero added. The initial conversion price is 57.75 euros, a 40 percent premium to the reference price of 41.25 euros. Interest will be paid on the shares at 3.25 percent per annum.

The proceeds are to be used to finance the repurchase of outstanding convertible bonds and for general corporate purposes. This is intended to improve the maturity profile and maintain a strong liquidity position, the statement added.

Group CEO Niklas Östberg is thus likely to draw consequences from last year, when, in addition to a cautious outlook, worries about the refinancing of outstanding convertible bonds caused the share price to plummet by a significant double-digit percentage in one day. Investors increasingly wondered how the Group's management was going to manage sustained high investments and repayments at the same time. It was not until Östberg secured billions of euros in new funding that the situation became clearer and investors were reconciled.

Analysts reacted to the latest news with mixed feelings. While Bernstein expert William Woods highlighted an improvement in bond maturity dates, Jefferies industry expert Giles Thorne wondered why Delivery Hero placed the convertible bonds at precisely this time. He said the move came out of nowhere and was not in itself necessary: for example, the group had recently greatly improved its liquidity. The market had assumed that the management would take its time with a debt reduction./ngu/tav/stk