KOOV.L Regulatory News (KOOV)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

For immediate release

13 April 2016

Koovs plc

 Koovs progresses fundraising plans with firm indications of interest to date at approximately £20 million

and

Notice of General Meeting

Introduction

Koovs plc ("Koovs", the "Company" and, together with its subsidiary undertaking, the "Group") (AIM: KOOV.L) today announces that it proposes to raise gross proceeds of approximately £20 million and to have the ability to raise further funds of up to £10 million through the issue of up to a total of 120,000,000 new ordinary shares of one penny each ("Ordinary Shares") at 25 pence per Ordinary Share (the "Issue Price") (the "Capital Raising" and the "New Ordinary Shares"). The Company has currently received firm indications of interest representing approximately £20 million.

The net proceeds of the Capital Raising will be used by Koovs to fund its strategic plan and will primarily be invested in marketing, working capital, and to normalise the Group structure by increasing the Company's holding in Koovs Marketing Consulting Private Limited ("Koovs India") by way of an acquisition of shares in Koovs India from Infotel E-Commerce Private Limited ("Infotel").

It is intended that an initial tranche of the Capital Raising will be admitted to trading on AIM shortly following the General Meeting, followed potentially by further tranches prior to 30 June 2016.

The maximum number of New Ordinary Shares to be issued by the Company pursuant to the Capital Raising represents approximately 267.4 per cent. of the existing issued share capital of the Company and the Issue Price represents a discount of approximately 7.4 per cent. to the closing mid-market price of 27 pence per Ordinary Share on 12 April 2016, being the last trading day immediately preceding the publication of this announcement.

Mary Turner, Chief Executive Officer of Koovs commented:

"Today's announcement follows an excellent trading update at which we delivered year on year sales growth of 189%. Koovs appeals to young, aspirational, urbanites in India - whose appetite for online fashion is booming and is expected to rise from £300 million in 2015 to £1.5 billion by 2020. This fundraising is a part of our planned growth, and will allow us to continue to build our brand, develop our customer offer, and deliver our strategy to become India's number one western fashion destination by 2020."

Details of the Capital Raising

The Capital Raising is expected to comprise subscriptions by certain directors of the Company who intend to participate in the Capital Raising and certain other investors (the "Subscriptions") and placings with existing and new institutional investors (the "Placings"), in each case at the Issue Price. The Capital Raising is conditional upon, among other things, firm commitments being received and legally binding agreements being entered into in respect of the Subscriptions and the Placings. There is no certainty that any such agreements will be entered into or any New Ordinary Shares will be issued pursuant to the Capital Raising and confirmation of any agreements entered into relating to subscriptions for New Ordinary Shares shall be made by the Company in due course.

Participation in the Capital Raising will be for invited subscribers only and members of the public are not eligible to take part in the Capital Raising. The details of the Capital Raising in this Announcement are for information purposes only and do not constitute an offer to sell or issue, or the solicitation of an offer to buy or subscribe for New Ordinary Shares. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.

Peel Hunt LLP ("Peel Hunt") is acting as nominated adviser, broker and sole bookrunner to the Company in connection with the Placings.

The New Ordinary Shares (if issued in full) will represent approximately 267.4 per cent. of the existing issued share capital of the Company and the Issue Price represents a discount of approximately 7.4 per cent. to the closing mid-market price of 27 pence per existing Ordinary Share on 12 April 2016, being the last trading day immediately preceding the publication of this announcement.

The New Ordinary Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

The Capital Raising is conditional upon, among other things, firm commitments being received and legally binding agreements being entered into in respect of the Placings and the Subscriptions, certain resolutions (the "Resolutions") to give the Directors authority to allot the New Ordinary Shares being duly passed by shareholders at a general meeting of the Company (the "General Meeting") to be held at the offices of Peel Hunt, Moor House, 120 London Wall, London EC2Y 5ET at 11.00 a.m. on 29 April 2016, upon Admission becoming effective and a placing agreement to be entered into between the Company and Peel Hunt not having been terminated in accordance with its terms.

The Board intend to make an application for a tranche of the New Ordinary Shares to be admitted to trading on AIM ("Initial Admission") shortly following the General Meeting.

Further applications will be made after the Initial Admission for additional tranches of New Ordinary Shares to be admitted to trading on AIM, on one or more occasions at any time prior to 30 June 2016.

A circular containing, amongst other things, the notice convening the General Meeting is expected to be published by the Company later today and will be available on the Company's website www.koovs.com/corporate.

Recommendation and importance of the vote

The Directors consider the Capital Raising to be in the best interests of the Company and shareholders as a whole. Accordingly, the Directors unanimously intend to recommend shareholders to vote in favour of the Resolutions to be proposed at the General Meeting as they intend to do so in respect of their (and their connected persons') beneficial holdings amounting, in aggregate, to 27,100,136 Ordinary Shares, representing approximately 60.4 per cent. of the existing issued ordinary share capital of the Company.

Whilst the Directors believe that alternative sources of funding are potentially available to the Group, they are of the view that the terms associated with such funding would be significantly more onerous than those of the Capital Raising. It is therefore of the utmost importance that shareholders vote in favour of the Resolutions. If the Resolutions are not passed by the shareholders at the General Meeting and the Capital Raising does not proceed, the Company will need to seek alternative sources of funding but given the current stage of the Company's development this outcome is unlikely to be favourable to Shareholders.

Important Notice

The distribution of this announcement and any other documentation associated with the Capital Raising into jurisdictions other than the United Kingdom may be restricted by law. Persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws or regulations of any such jurisdiction. In particular, such documents should not be distributed, forwarded to or transmitted, directly or indirectly, in whole or in part, in, into or from the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where to do so may constitute a violation of the securities laws or regulations of any such jurisdiction (each a "Restricted Jurisdiction").

The New Ordinary Shares have not been and will not be registered under the US Securities Act 1933 (as amended) (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and, accordingly, may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within the United States except in reliance on an exemption from the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States.

There will be no public offer of the New Ordinary Shares in the United States. The New Ordinary Shares are being offered and sold outside the US in reliance on Regulation S under the US Securities Act. The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the US or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the New Ordinary Shares or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the US.

The New Ordinary Shares have not been and will not be registered under the relevant laws of any state, province or territory of any Restricted Jurisdiction and may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within any Restricted Jurisdiction except pursuant to an applicable exemption from registration requirements. There will be no public offer of New Ordinary Shares in Australia, Canada, Japan, or the Republic of South Africa.

This announcement is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in any jurisdiction and should not be relied upon in connection with any decision to subscribe for or acquire any of the New Ordinary Shares.

This announcement has been issued by, and is the sole responsibility of, the Company. No person has been authorised to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorised by the Company or Peel Hunt. Subject to the AIM Rules for Companies, the issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this announcement or that the information contained in it is correct at any subsequent date.

Capital Raising

Participation in the Capital Raising will be for invited subscribers only and members of the public are not eligible to take part in the Capital Raising. The details of the Capital Raising contained in this document are for information purposes only and do not constitute an offer to sell or issue, or the solicitation of an offer to buy or subscribe for New Ordinary Shares. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.

THE CAPITAL RAISING IS ONLY DIRECTED AT (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED ("QUALIFIED INVESTORS"), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC AS AMENDED (INCLUDING ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) ('INVESTMENT PROFESSIONALS') OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ('HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC') OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS IN (A) AND (B) TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THE INFORMATION ON THE CAPITAL RAISING MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THE CAPITAL RAISING RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THE CAPITAL RAISING DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

THE CAPITAL RAISING WILL BE FOR INVITED RELEVANT PERSONS ONLY WHO WILL BE INVITED TO, AND WHO CHOOSE TO, PARTICIPATE IN THE CAPITAL RAISING AND BY WHOM OR ON WHOSE BEHALF A COMMITMENT TO SUBSCRIBE FOR NEW ORDINARY SHARES IS GIVEN.

Peel Hunt, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for the Company and no one else in connection with the Capital Raising and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Capital Raising and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Capital Raising or any matters referred to in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on Peel Hunt by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Peel Hunt does not accept any responsibility whatsoever for the contents of this announcement, and makes no representation or warranty, express or implied, for the contents of this announcement, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the New Ordinary Shares or the Capital Raising, and nothing in this announcement is or shall be relied upon as, a promise or representation in this respect whether as to the past or future. Peel Hunt accordingly disclaims to the fullest extent permitted by law all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement.

No statement in this announcement is intended to be a profit forecast or estimate and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by law or by the AIM Rules for Companies, the Company undertakes no obligation to release publicly the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this announcement.

This announcement should not be considered a recommendation by the Company, Peel Hunt or any of their respective directors, officers, employees, advisers or any of their respective affiliates, parent undertakings, subsidiary undertakings or subsidiaries of their parent undertakings in relation to any purchase of or subscription for the New Ordinary Shares. Price and volumes of, and income from, securities may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. Persons needing advice should consult an independent financial adviser.

Neither the content of the Company's website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this announcement.