Shareholders of PChomestore Inc (商店街市集) have approved a proposal to raise new capital through a private placement after the company asked PChome eBay Co (露天市集) to become a major shareholder.
PChomestore is a subsidiary of PChome Online Inc (網路家庭), the nation’s largest online shopping Web site operator.
The company, whose merchant platform allows buyers and sellers to exchange products and services, said in a statement that its shareholders agreed at an extraordinary meeting on Thursday to issue 7.843 million new shares at NT$51 each, with the aim of raising about NT$400 million (US$13.33 million).
PChome eBay, a joint venture between PChome Online and eBay Inc, will be a strategic investor in its latest issue, it said.
It added that proceeds from the private placement will be used to replenish working capital and strengthen its mobile auction business.
The private placement is expected to be completed by the end of next month.
SUBSTANTIAL EXPANSION
PChomestore’s individual merchant platform business has expanded substantially this year, with the number of stores registering for the online auction site reaching 50,000, general manager Su Yun (蘇芸) said in the statement.
Orders on the Nov. 11 Singles’ Day shopping festival broke PChomestore’s daily transaction record of 430,000, with revenue surging 600 percent from Nov. 11 last year, Su said.
While PChomestore’s free shipping policy on all purchases has boosted its individual merchant platform, a pricing war with major rivals — including Shopee Taiwan Co Ltd (樂購蝦皮) and Yahoo Taiwan Holding Ltd (雅虎台灣) — in the consumer-to-consumer sector has increased the company’s operational expenses and been a drag on its earnings, the company said.
In the first three quarters of the year, the company reported NT$401.33 million in losses, or NT$15.45 in losses per share, compared with earnings per share of NT$0.75 for the same period last year, a financial statement showed.
CUMULATIVE TOTAL
In the first 10 months of the year, PChomestore’s cumulative revenue totaled NT$1.052 billion, down 22.04 percent from NT$1.349 billion in the same period last year, the data showed.
PChomestore shares on Friday ended 5.8 percent higher to NT$52.9 in trading on the Taipei Exchange. The stock has declined 35.41 percent this year, compared with the over-the-counter bourse’s 19.98 percent rise.
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