MYSL.L Regulatory News (MYSL)

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, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, AUSTRALIA, THE REPUBLIC OF IRELAND, NEW ZEALAND OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

2 September 2019

MySale Group plc

(the "Company", "MySale" or the "Group")

Launch of Open Offer

MySale (AIM: MYSL), a leading international online retailer, is pleased to announce an open offer to raise up to approximately £2.1 million (before expenses) by the issue of 102,887,768 Open Offer Shares in the Company at an Issue Price of 2 pence per Open Offer Share.

Pursuant to the Open Offer, qualifying shareholders will be given the opportunity to subscribe for:

2 Open Offer Shares for every 3 Existing Shares

held by Qualifying Shareholders at the Record Date and so on in proportion for any other number of Existing Shares then held.

The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by both subscribing for their respective Basic Entitlements and by subscribing for Excess Shares under the Excess Application Facility, with applications being scaled back at the Company's absolute discretion.

Qualifying Shareholders seeking to eliminate their dilution from the Placing can apply for Excess Shares under the Excess Application Facility. There are full details and a worked example of this under the heading entitled 'Example' below.

The gross proceeds of the Open Offer, net of a further payment to HSBC, will be used to support the Company's 'ANZ First' strategy, as well as for general working capital purposes.

Further information on the Open Offer is set out in this announcement and the Circular to be posted today to Qualifying Shareholders, along with the Application Form (where applicable).

Market Abuse Regulation:

This announcement is released by MySale Group plc and contains inside information for the purposes of the Market Abuse Regulation (EU) 596/2014 ("MAR") and is disclosed in accordance with the Company's obligations under Article 17 of MAR. The person responsible for arranging the release of this information is Carl Jackson, Chief Executive Officer of the Company.

Enquiries:

OPEN OFFER STATISTICS

Notes

1. As at the Last Practicable Date.

2. Assuming take-up in full of the Open Offer by Qualifying Shareholders.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS1

Notes

1. Each of the times and dates above are indicative only and if any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of an announcement through a Regulatory Information Service. References to time in this document are to London time, unless otherwise stated.

Introduction

On 20 August 2019, the Board announced that it had conditionally raised approximately £11.2 million (before expenses) by the issue of 560,515,464 new Ordinary Shares at an Issue Price of 2 pence per new Ordinary Share by way of a Placing to certain new and existing shareholders.

In order to provide existing Shareholders who did not take part in the Placing with an opportunity to mitigate or potentially eliminate the dilution in their existing shareholding, the Company intends to provide Qualifying Shareholders with the opportunity to participate in the Open Offer at the Issue Price to raise up to approximately £2.1 million (assuming full take up of the Open Offer). The Open Offer is in addition to and separate from the Placing. 

The Open Offer is conditional, inter alia, upon shareholder approval, which will be sought at the General Meeting of the Company to be held on 6 September 2019, notice of which was set out at the end of the Placing Circular. Application will be made to the London Stock Exchange for the Open Offer Shares to be admitted to trading on AIM.

The purpose of this document is to provide you with details of the proposed Open Offer.

Principal terms of the Open Offer

Qualifying Shareholders will be given the opportunity to subscribe for Open Offer Shares at the Issue Price, payable in full on application and free of all expenses, on the basis of:

2 Open Offer Shares for every 3 Existing Shares

held by Qualifying Shareholders at the Record Date and so on in proportion for any other number of Existing Shares then held.

In addition, provided that a Qualifying Shareholder takes up their Basic Entitlement in full, they will be able to apply for Excess Shares under the Excess Application Facility, with applications being scaled back at the Company's absolute discretion.

The Issue Price of 2 pence per Open Offer Share (which is the same as the issue price of the Placing) represents a 31.0 per cent. discount to the closing middle market price of 2.9 pence per Ordinary Share on the Last Practicable Date.

Directors' support and participation in the Open Offer

The Directors are fully supportive of the Open Offer, however, do not intend to participate in the Open Offer in respect of their respective Basic Entitlements. Notwithstanding that the Directors do not intend to participate in the Open Offer, Jamie Jackson and Carl Jackson have agreed to subscribe for 10,000,000 and 100,000,000 Placing Shares for £200,000 and £2.0 million respectively pursuant to the Placing. Further details of this subscription are set out in the Company's announcement dated 20 August 2019.

Further details of the Open Offer

The Open Offer will result in the issue of up to 102,887,768 Open Offer Shares, representing approximately 12.6 per cent. of the issued share capital of the Company, as enlarged by the Placing and Open Offer (assuming full-take up). The Open Offer Shares, when issued, will be free of all liens, charges and encumbrances and will rank in full for all dividends or other distributions declared, made or paid on the Ordinary Shares after the date of issue of the Open Offer Shares and otherwise pari passu in all respects with the Existing Shares. No temporary documents of title will be issued.

Any Open Offer Shares not subscribed for by Qualifying Shareholders will be available to the other Qualifying Shareholders under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Open Offer Shares in excess of their Basic Entitlement. Applications for Excess Entitlements will be satisfied only and to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their Basic Entitlements and may be scaled back at the Company's absolute discretion.

The Open Offer Shares will be issued by the Company conditional, inter alia, on the passing of the Resolutions proposed at the General Meeting of the Company to be held on 6 September 2019, which proposes that the Directors are generally and unconditionally authorised to issue shares in accordance with Article 2.15 of the Articles and empowered pursuant to Article 2.15 to allot such shares for cash as if Article 2.8 did not apply to such allotment.

Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in certain Restricted Jurisdictions will not, subject to certain exemptions, qualify to participate in the Open Offer.

Qualifying Shareholders should be aware that the Open Offer is not a rights issue. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying Non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying CREST Shareholders should be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Qualifying CREST Shareholders who do not apply under the Open Offer.

The Open Offer has not been underwritten. The Open Offer is not conditional upon the level of applications made to subscribe under it or any minimum levels of proceeds being raised.

Therefore, there may be fewer than 102,887,768 Open Offer Shares issued pursuant to the Open Offer.

Qualifying Shareholders seeking to eliminate their dilution from the Placing

Qualifying Shareholders seeking to eliminate their dilution from the Placing by participating in the Open Offer should follow the following steps:

·; Take-up their full Basic Entitlement, being a ratio of 2 Open Offer Shares for every 3 Existing Shares. This Basic Entitlement must be taken up in full to be eligible to apply for further Open Offer Shares; and

·; Apply for additional Open Offer Shares under the Excess Application Facility for an amount of six times the Basic Entitlement of the Qualifying Shareholder.

Excess Shares under the Excess Application Facility will only be available on the basis that other Qualifying Shareholders have not taken up their Basic Entitlements. Further, Excess Shares will be scaled back at the Company's absolute discretion and no assurance can be given that excess applications will be met in full or in part or at all.

Example

A Qualifying Shareholder with an interest in 100,000 Ordinary Shares, or approximately 0.065 per cent. of the Existing Shares in issue prior to the Placing, that wishes to eliminate their dilution from the Placing by participating in the Open Offer, would take the following steps:

·; The 100,000 Ordinary Shares would provide a Basic Entitlement of 66,666 Open Offer Shares, (being a 2-for-3 basis, rounded down to the nearest whole Open Offer Share). The Qualifying Shareholder would need to take this up in full, for consideration of £1,333.32;

·; The Qualifying Shareholder would then need to apply for 399,996 Excess Shares under the Excess Application Facility, being six (6) times their Basic Entitlement of 66,666 Open Offers Shares. Consideration for the 399,996 Excess Shares would be £7,999.92;

·; In total, the Qualifying Shareholder, currently with an interest in 100,000 Ordinary Shares, will have applied for 466,662 Open Offer Shares for consideration of £9,333.24; and

·; Upon Admission of the Open Offer Shares, the Qualifying Shareholder would have an interest in 566,662 Ordinary Shares, or approximately 0.069 per cent. of the Ordinary shares in issue (assuming no scale back of Open Offer Shares and take-up of Open Offer Shares in full).

Background to and reasons for the Open Offer

Introduction

As announced on 20 August 2019, as part of the Strategic Review, the Board also implemented a detailed action plan to address the ongoing challenges faced by the Group, focusing on its activities and opportunities in the ANZ region through its 'ANZ First' strategy.

The Board's 'ANZ First' strategy aims to transform the Group into an ANZ-focused retail Marketplace platform with three core partner offerings, being Consignment, Drop Ship and Supplier Sales, with the further development of an International Returns solution for its partners.

Outcome of the Strategic Review and the Placing

·; On completion, the net proceeds of the Placing will enable the repayment of the Group's bank debt, meaning the Group will operate on a debt free basis and is expected to deliver positive cashflow;

·; Shareholders representing approximately 79 per cent. of the Existing Shares have demonstrated their support for the Placing, by undertaking to vote their shares in favour of the Resolution to approve the Placing at the General Meeting to take place on 6 September 2019;

·; This transition will involve the continued sell down of nearly all of the Group's 'ownbuy' stock, removing the requirement for this working capital to be tied up in inventory;

·; A significantly reduced cost base as a result of restructuring the supply chain, reducing headcount, leveraging the benefits from the investment in the technology platform and operating more efficiently;

·; The Group will continue to build on the flexible and scalable proprietary technology platform and the user focused innovation such as the existing 'buy-now, pay-later' OurPay product and margin enhancing Marketing Services offering;

·; The Group will continue to leverage the counter seasonal opportunity that provides a unique solution for international brands to access the Group's customer base in ANZ and South East Asia;

·; The Group has agreed a strategic marketplace partnership with a leading European online luxury fashion retailer and remains in discussions with further domestic and international retailers; and

·; The Group will strengthen the Board with the appointment of three new additional non-executive and executive directors, including a CFO.

Further detail on the Background and reasons to the Open Offer are available in the Circular to be posted today to Qualifying Shareholders, along with the Application Form (where applicable).

Current trading and outlook

The Board reiterates the below update announced on 20 August 2019.

Conditional Banking Agreement

On 20 August 2019, the Company and HSBC entered into the Conditional Banking Agreement, whereby HSBC provided an undertaking to:

• accept a payment of £5.5 million from the Company as full and final settlement of the balance of the facilities (together with any accrued charges and costs); and

• maintain the day-to-day corporate banking arrangements (other than the debt facilities) for the Company for 180 days.

These arrangements were conditional, inter alia, on the Company completing the Placing to raise a minimum of £10.0 million, of which £5.5 million would then pay down the balance of the facilities with HSBC.

In addition, any proceeds above £10.75 million raised in the Placing and Open Offer will be shared 25 per cent. and 75 per cent. between HSBC and the Company respectively.

Subsequently, the Company announced that it had conditionally raised proceeds of approximately £11.2 million through the Placing. Accordingly, the total payment made to HSBC under the Placing will be approximately £5.6 million. This amount could increase, depending on the final take-up of the Open Offer.

Following these repayments by the Company of the HSBC facilities, the Group will be debt free.

Use of Proceeds

The gross proceeds of the Open Offer, net of expenses and a further payment to HSBC set out above, will be used to support the Company's 'ANZ First' strategy, as well as for general working capital purposes.

New Management Options Scheme

Further to the Announcement, where the Board stated its belief that the success of the Group will depend, to a significant degree, on motivating and closely aligning the Directors, senior management and employees, the Board intends to introduce a new share incentive scheme to replace existing share incentive arrangements.

It is envisaged that share options and incentives will be granted over a maximum of 10 per cent. of the issued share capital of the Company, as enlarged by the Placing and Open Offer. This will likely comprise a JSOP for Directors and senior management, as well as a share options scheme for employees.

Further information will be provided in due course.

Action to be taken

If you are a Qualifying Non-CREST Shareholder you will receive an Application Form which gives details of your entitlement under the Open Offer (as shown by the number of Open Offer Entitlements allocated to you). If you wish to apply for Open Offer Shares under the Open Offer, you should complete the Application Form in accordance with the procedure for application set out in the Open Offer Circular and in the Application Form itself.

If you are a Qualifying CREST Shareholder no Application Form will be sent to you and you will receive a credit to your appropriate stock account in CREST in respect of the Open Offer Entitlements representing your entitlement under the Open Offer. You should refer to the procedure for application set out in the Open Offer Circular and to your CREST sponsors regarding the action to be taken in connection with this document and the Open Offer.

The latest time for applications under the Open Offer to be received is 11.00 a.m. on 18 September 2019. The procedure for application and payment depends on whether, at the time at which application and payment is made, you have an Application Form in respect of your entitlement under the Open Offer or have Open Offer Entitlements credited to your stock account in CREST in respect of such entitlement. The procedures for application and payment are set out in the Open Offer Circular. Further details also appear in the Application Forms which will be sent to Qualifying Non-CREST Shareholders.

If you are in any doubt as to the procedure for acceptance, please contact Neville Registrars Limited on 0121 585 1131. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m. to 5.00 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Neville Registrars cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

Settlement and dealings

Application will be made for the Open Offer Shares to be admitted to trading on AIM. It is expected that Admission will become effective on 20 September 2019 and that dealings for normal settlement in the Open Offer Shares will commence at 8.00 a.m. on 20 September 2019. Further information in respect of settlement and dealings in the Open Offer Shares is set out in Part III of this document.

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in the Open Offer Circular and in the Application Form.

Definitions

Admission the admission to trading on AIM of the Open Offer Shares becoming effective in accordance with Rule 6 of the AIM Rules

Application Form the application form relating to the Open Offer provided with the Circular

Basic Entitlement the basic entitlement to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder pursuant to the Open Offer

Board or Directors the directors of the Company or any duly authorised committee thereof

Circular the Circular relating to the Open Offer to be sent to Qualifying Shareholders on 2 September 2019

CREST the computer system (as defined in the CREST Regulations) in respect of which Euroclear is the recognised operator (as defined in those regulations)

Excess Application Facility the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Basic Entitlement in accordance with the terms and conditions of the Open Offer

Excess Shares Open Offer Shares applied for by Qualifying Shareholders under the Excess Application Facility

Existing Shares the 154,331,652 Ordinary Shares in issue at the Record Date

General Meeting the general meeting of the Company to be held at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL at 11.00 a.m. on 6 September 2019

Issue Price 2p per Open Offer Share, being the same price as the Placing Price

Open Offer the invitation by the Company to Qualifying Shareholders to apply to subscribe for the Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in the Circular and, in the case of Qualifying Non−CREST Shareholders, in the Application Form

Open Offer Entitlements the Basic Entitlements and Excess Entitlements

Open Offer Shares the new Ordinary Shares offered by the Company pursuant to the Open Offer

Ordinary Shares ordinary shares of no par value in the share capital of the Company

Placing the conditional placing by N+1 Singer (as bookrunner) of 560,515,464 new Ordinary Shares as described in the Company's Announcement dated 20 August 2019

Placing Admission means the admission of the Placing Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules

Placing Circular the circular relating to the Placing which was sent to Shareholders on 21 August 2019

Placing Shares the 560,515,464 new Ordinary Shares which are proposed to be allotted and issued by the Company pursuant to the Placing

Qualifying CREST Shareholders Qualifying Shareholders holding Existing Shares in uncertificated form

Qualifying Non-CREST Shareholders Qualifying Shareholders holding Existing Shares in certificated form

Qualifying Shareholders holders of Existing Shares on the register of members of the Company at the Record Date but excluding any non-exempt Overseas Shareholder in a Restricted Jurisdiction

Record Date 6.00 p.m. on 30 August 2019

Resolutions the Resolutions set out in the notice of General Meeting in the Placing Circular

Restricted Jurisdiction United States, Canada, Australia, the Republic of South Africa, Japan or any other jurisdiction where to do so may constitute a breach of local securities laws or regulations

Shareholder a holder of Ordinary Shares