Delivery Hero wants to use new debt to repay some of its convertible bonds early.

The food delivery company announced on Monday that it would be taking out loans amounting to 500 million euros. The company also wants to negotiate better conditions for the two existing credit lines of 813 million dollars and 300 million euros. Their term is to be extended from August 2027 to the end of 2029.

The planned partial buyback affects the convertible bond maturing in 2025, of which EUR 500 million is still outstanding following an initial buyback last year, and the EUR 750 million convertible bond maturing in 2026. "Depending on the dynamics of the process, we assume that we will buy back at least EUR 300 million in convertible bonds, whereby we could make further buybacks over time if this is advantageous for the further optimization of our capital structure," said CFO Emmanuel Thomassin. The remaining amount of the new loans will be used for general corporate purposes.

WORRYING ASIA BUSINESS - INVESTORS RELIEVED

Delivery Hero's announcement comes a few days after negotiations over the sale of parts of the Southeast Asian business of its subsidiary Foodpanda broke down. According to a magazine report, the plans for an exit from Foodpanda Taiwan also fell through due to differing price expectations. The Asian business is the stumbling block for Delivery Hero's growth.

The decision to take out new loans was well received by investors. The shares rose by up to 6.9 percent. In recent weeks, analysts had doubted that Delivery Hero would be able to increase its free cash flow quickly enough to refinance liabilities due in 2026/2027 with a total volume of EUR 1.63 billion without a capital increase.

CEO Niklas Östberg once again tried to dispel such concerns on Monday. "We are ideally positioned to service all upcoming debt maturities with our organic cash flows and at the same time take advantage of attractive financing opportunities."

He therefore confirmed the full-year cash inflow target. He also maintained the other key figures. Delivery Hero is targeting growth in segment sales of 15 to 17 percent and an adjusted operating profit of 725 to 775 million euros.

(Report by Hakan Ersen and Alexander Hübner, edited by Ralf Banser. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).