27 Sep 2018 07:00
27 September 2018
Koovs plc
("Koovs" or the "Company")
Future Lifestyle Fashions Limited signs subscription agreement to invest additional funds between £9.5m to £10.5m
The Subscription
Further to the Company's announcements on 4 July 2018 and 19 July 2018, Koovs plc (AIM: KOOV) is pleased to announce that it has signed a subscription agreement with strategic partner Future Lifestyle Fashions Limited ("FLFL"), part of Future Group - India's largest retail group, for FLFL to take its current shareholding in Koovs from 16.25% up to a maximum of 29.99%.
Under existing shareholder authority and subject to the satisfaction of certain conditions, including the approval of Reserve Bank of India ("RBI"), FLFL have signed a subscription agreement to subscribe for between 63,300,000 and 69,850,000 new ordinary shares of 1p each in the capital of the Company ("Ordinary Shares") at a price of 15p per share, raising between £9.5m and £10.5m of cash (the "Subscription"). Once completed FLFL will own between 28.89% and 29.99% of the Company's enlarged issued share capital.
The strategic partnership with FLFL represents a transformational deal for the Company and is expected to deliver synergies across the value chain from manufacturing and distribution to market reach, marketing and customer engagement.
Lord Alli, Chairman of Koovs, said: "This additional investment and commitment from FLFL underlines the tremendous opportunity to leverage our strategic partnership and ensure that Koovs is the aspirational first choice online western fashion destination for India's twenty-somethings. The partnership will significantly benefit our customers, partners and all shareholders."
About Future Group
FLFL operates over 400 stores in India with over six million square feet of retail space and owns and markets 30 exclusive fashion brands through branded stores, department stores and multi brand outlets, including its own Central and Brand Factory chains.
FLFL is part of Future Group - one of India's leading consumer, retail and services companies covering fashion, food and homewares. It owns over 60 brands, operates close to 2,000 retail stores spanning over 22 million square feet and attracts a footfall of over 500 million a year. Future Group sells in the region of 300 million garments a year, making it one of the top 10 fashion apparel companies in the world. Future Group also has one of India's most unique and rapidly-growing digital payment platforms, Future Pay, which has an active user base of over 6.5 million.
Related party transaction
For the purposes of the AIM Rules for Companies ("AIM Rules"), FLFL is a substantial shareholder in the Company and therefore a related party. As such, the Subscription constitutes a related party transaction.
The directors of the Company, having consulted with Peel Hunt LLP in its capacity as the Company's nominated adviser for the purposes of the AIM Rules, consider the terms of the Subscription to be fair and reasonable insofar as shareholders are concerned.
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