Last minute rescue for Letsbuyit.com

Troubled co-operative purchasing website Letsbuyit.com has raised the 4m euros needed to avoid being declared bankrupt by a Dutch court today.

Letsbuyit said the money had been raised from existing investors and German venture capitalist Kimvestor, which has said it may invest 50m euros in the company by the end of February.

On 29 December, the company's Dutch operation was granted protection from creditors until 14 March, but last week this date was effectively brought forward to 7 February after the court ruled that Letsbuyit must raise 28m euros by two weeks from today.

Promises of 50m euros from Kimvestor would appear to have bought Letsbuyit, which runs websites in 14 European countries, more time as administrators have withdrawn requests to begin bankruptcy proceedings. The firm generated 38.5m euros in revenue last year.

Letsbuyit chief executive John Palmer said: "We are clearly in a tough phase of our business but based on last year's strong results and ongoing investor support, the new management is confident in being able to resume operations with a refreshed and strengthened company and a cost structure that is relevant to the current market environment."

Although the news gives customers further hope that their outstanding orders may be fulfilled, they could still not contact the company by phone at 10am this morning.

Shares in the firm has risen by 125 per cent to 0.54 euros in heavy trading this morning. Palmer said the firm was also talking to other possible investors as well as Kimvestor.

Analysts said the deal bought the firm more time but did not change Letsbuyit's fundamental problem of generating a loss on every sale it makes.