KOOV.L Regulatory News (KOOV)

10 March 2014

Koovs plc ("Koovs" or the "Company")

Admission and First Day of Dealings on AIM

Koovs plc (AIM:KOOV) is pleased to announce the admission of its entire issued and to be issued ordinary share capital to trading on the AIM market of the London Stock Exchange ("AIM") ("Admission" or the "IPO"), and the commencement of dealings at 8.00 a.m. today.

Highlights

· The Company has raised £22.0 million (before expenses) by means of a fully underwritten placing (the "Placing") by Peel Hunt LLP of 14,666,667 new ordinary shares of one penny each ("Ordinary Shares") (the "Placing Shares") at a placing price of 150 pence per share (the "Placing Price")

· Following Admission, the Company will subscribe for 57.5 per cent. of the enlarged share capital of Koovs Marketing Consulting Private Limited ("Koovs India") using approximately £16.5 million of the new funds raised in the Placing

· The total issued share capital of the Company at Admission is 24,110,719, giving the Company a market capitalisation at the Placing Price of approximately £36.2 million

· Peel Hunt LLP is nominated adviser and sole broker to the Company

History of Koovs India and the Company

Koovs India was established in May 2010 as a general e-commerce business in India, operating through the website, Koovs.com. In August 2011, Infotel E-Commerce Private Limited, a company controlled by the Nahata family in India, acquired a controlling interest in Koovs India to focus the business on the sale of mobile phones and other electronic goods. The Nahata family has a successful background in the telecommunications sector in India.

Koovs.com's focus subsequently moved to fashion products and fashion-related accessories when, in September 2012, the Company, founded by Lord Waheed Alli and Robert Bready (formerly Product Director of ASOS plc), began to supply Koovs India with consultancy services in fashion design for an e-commerce business.

The new Koovs.com website was launched in September 2012 with the aim of becoming the leading fashion e-commerce website in India. The website offers a fashion-forward, value-focused concept for young and aspirational consumers in India, with a wide range of branded and private label apparel products.

Based on the success of the collaboration between the Company and Koovs India during the reconfiguration of Koovs.com as a fashion-focused e-commerce business, the directors and the shareholders of the Company and Koovs India have decided to combine the two businesses (together, the "Group") through the subscription by the Company for a controlling interest in Koovs India (the "Subscription") and to seek an admission to trading of the Company on AIM.

Restructuring as a wholesale trading entity

Under Indian exchange control laws, foreign direct investment in businesses in India which are engaged in multi-brand e-commerce retailing is prohibited. Therefore, in order to facilitate the Subscription, Koovs India now operates exclusively as a wholesale trading entity supplying branded and private label fashion products, currently only to Marble E-retail Private Limited ("Marble"). Marble, which is independently owned and managed, now operates the Koovs.com retail e-commerce website under the terms of a supply agreement with Koovs India and fulfils all of the roles of a retailer.

Proposed structure of the Group

In order to establish the proposed Group structure, the Company and Koovs India have entered into a subscription agreement under which the Company has agreed, conditional upon Admission, to subscribe for shares representing 57.5 per cent. of the enlarged share capital of Koovs India using approximately £16.5 million of the new funds raised by the Company pursuant to the Placing. These funds will be used by Koovs India to build stock, increase marketing and fund operating losses as the business continues its rapid growth trajectory. Due to Indian foreign exchange laws, completion of the Subscription will take place upon receipt of the Subscription monies by Koovs India on or about the date of Admission.

Following Admission, new investors at the IPO will own approximately 60.8 per cent. of the enlarged share capital of the Company, the Nahata family will, through Exicom Tele-Systems (Singapore) Pte. Limited, hold approximately 15.0 per cent., and management will hold approximately 24.2 per cent. Given that the Company will own 57.5 per cent. of Koovs India upon completion of the Subscription, on a see-through basis new investors at the IPO will therefore own approximately 35.0 per cent. of the economic interest of Koovs India.

Objectives of the Group

The objective of the Group is, over the next five years, to build Koovs.com into India's leading digital fashion website and thereafter to continue to increase market share.

The five steps which the directors of the Company (the "Board") consider are key to achieving this objective are:

· to build the Koovs private label and establish its fashion credibility;

· to bring strong international brands to the new Indian consumer;

· to extend Koovs.com's fashion credentials by bringing both established and new designers to the consumer in India through exclusive design collaborations;

· to develop delivery and price promises for the consumer that are reliable, affordable and price-worthy; and

· to use technology to power the consumers' fashion needs.

Backed by an experienced and credible management team, the Company is well placed to benefit from the expected growth in retail and e-commerce across India.

Details of the Placing

The Company has raised £22.0 million (before expenses). The Placing Shares represent approximately 60.8 per cent. of the Company's total issued share capital following Admission of 24,110,719 Ordinary Shares.

The Placing Shares are credited as fully paid and rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared paid or made after Admission. The Company's total issued share capital following Admission will be 24,110,719 Ordinary Shares.

Reasons for the Placing and use of proceeds

The net proceeds of the Placing receivable by the Company are approximately £20.4 million. The net proceeds will be applied principally as follows:

· Approximately £16.5 million to subscribe for 165,986,056 ordinary shares in Koovs India on the terms of the Subscription

· to fund the general working capital requirements of the Group, particularly in connection with building a broader product range

· to expand the marketing activities of the Group

· to fund the Company's anticipated operating losses through to breakeven and beyond

Further information on the Company and the Admission is provided in the Company's admission document which can be found on the Company's website: www.koovs.com/corporate.

Lord Waheed Alli, Chairman commented:

"Today's successful fundraising marks an important step in our mission to build Koovs.com into India's leading digital fashion website. Success does not come overnight, but we are confident that with a team that is passionate about fashion and online, offering the best UK and international brands and collaborations, together with exciting own-label collections, we have the right foundations in place to capitalise on the exciting e-commerce opportunity in India."

For further information, please contact:

Notes to Editors

The aim is for Koovs.com to become the leading fashion e-commerce website in India.

The Company is headquartered in London, where the majority of its design and buying team is based, providing a wider pool of talent from which the Company is able to hire designers. All other operational functions are based at two sites in Gurgaon, near New Delhi.

Koovs Board of Directors

Lord Waheed Alli, aged 49 - Executive Chairman

Lord Alli joined the Board in 2012, having been Chairman of ASOS plc between 2000 and 2012. He has extensive knowledge of international fashion, coupled with a keen eye for innovation. Lord Alli's vision is to develop Koovs.com as the fashion website of choice in India.

Lord Alli was appointed to the House of Lords in 1998 and is currently Chairman of Silvergate Media Limited, part of a group of media companies which specialise in children's television, publishing and merchandising.

Robert Bready, aged 45 - Creative and Brand Director

Mr Bready joined the Board in 2012. He leads the creative team at Koovs, supported by design and buying teams based in London and Delhi.

Mr Bready began his career at River Island, holding a variety of merchandising roles in womenswear and menswear. In 1997, he moved to the Arcadia Group, spending eight years working across young fashion retailers including Miss Selfridge and TopMan, eventually becoming Senior Executive for the Miss Selfridge brand. Mr Bready was the Product Director of ASOS plc between 2006 and 2012.

Roy Naismith, aged 52 - Group Chief Financial Officer

Mr Naismith joined the Board in 2013. He was Group Finance Director of French Connection Group plc between 2001 and 2013. Mr Naismith trained as a chartered accountant with KPMG and has held senior finance positions at Capital Radio plc and the Starbucks Coffee Company.

Anant Nahata, aged 30 - Non-executive Director

Mr Nahata joined the Board in 2013. He represents the Nahata family interests in Koovs and is also Managing Director of Exicom, a leading telecom infrastructure business in India.

Mr Nahata has investment banking experience with Credit Suisse, having worked in Singapore and New York. He holds an Economics degree from the University of Pennsylvania, USA.

Dame Gail Rebuck, DBE, aged 62 - Non-executive Director

Dame Gail Rebuck joined the Board in 2014. She is Chair of Penguin Random House UK and sits on the company's Global Board of Representatives. She was Chair and CEO of Random House from 1991-2012 and a Non-executive Director of BskyB from 2002-2012. She sits on the Group Management Committee of the Board of Bertelsmann.

Dame Rebuck also chairs the Cheltenham Literature Festival and the Quick Reads charity. She is a Trustee of the National Literacy Trust and on the Council of the Royal College of Art, taking a particular interest in their fashion department.

Emily Sheffield, aged 40 - Non-executive Director

Ms Sheffield joined the Board in 2014 and has been a fashion advisory consultant to the Company since 2013. She is deputy editor of British Vogue and works on a wide range of projects within the magazine. More recently Ms Sheffield has also become editor of Miss Vogue, Vogue's new biannual magazine for teenagers.

Ms Sheffield began her career as a journalist at the Guardian newspaper after winning the Guardian student journalism award and then worked for a variety of publications, including the Evening Standard. She has been attending the international fashion shows regularly for over ten years and was a consultant and creative designer at Jigsaw.