TIDMKOOV
RNS Number : 6250R
Koovs PLC
18 June 2018
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.
Koovs plc ("Koovs" or the "Company")
Strategic Agreement with HT Media & Capital Raising
Update
The Board of Koovs plc (AIM: KOOV), ("Koovs" or the "Company")
is pleased to announce that it has entered into a conditional
agreement for a 2-year, GBP24.0m media deal (the "Agreement") with
strategic partner HT Media Limited ("HT Media"). HT Media is one of
India's largest media companies and owner of the Hindustan
Times.
Under the Agreement, and subject to satisfaction of the
principal condition set out below, the Company will acquire four
GBP6m tranches of media from HT Media at six monthly intervals over
a twenty-four-month period, 70% of which (GBP4.2m) in each
instalment will be satisfied by the issuance of new ordinary shares
in the Company to HT Media, with the balancing 30% (GBP1.8m) to be
acquired by Koovs in cash.
Strategic Agreement overview & capital raising update
The Agreement is conditional upon an initial cash raise of at
least GBP6m by the Company (the "Initial Equity Raise"). The
Company has already had positive discussions with existing and
potential new shareholders regarding support for the Initial Equity
Raise. The exact amount of new capital to be raised under the
Initial Equity Raise will be determined by the Board in discussion
with investors.
On satisfaction of this condition, the Agreement will, in
aggregate, provide Koovs with GBP16.8m of media and advertising
services from HT Media in exchange for the issuance of new ordinary
shares in the Company to HT Media, alongside which Koovs agrees to
commission further media and advertising services from HT Media for
GBP7.2m in cash to be drawn in four tranches over the 2-year
period.
The conversion price for the first GBP4.2m tranche of new shares
to be issued to HT Media is to be 10 pence per Koovs share.
Thereafter each tranche will be priced at the lower of Koovs' then
3-month average closing share price or the price of the most recent
round of equity fundraising by the Company.
Under the Agreement, HT Media will not be obliged to acquire
more than 20% of the Company's prevailing total issued share
capital and the Agreement is also subject to the Company's
prevailing market value not being below a nominal level during the
course of the Agreement.
The Agreement announced today follows on from the announcement
of the Company's Strategic Acceleration Plan (the "Plan") on 1st
March 2018. Upon completion of the Initial Equity Raise and then
the Agreement between Koovs and HT Media, the Company will have
successfully concluded the first stage of the Company's fundraising
strategy to raise a total of up to GBP50m of investment to fund the
Plan. As previously outlined, a significant part of this investment
will be devoted to marketing and brand, and completion of the
Agreement and Initial Equity Raise is expected to reduce the
outstanding fundraising requirement by approximately GBP23m.
Mary Turner, Chief Executive of Koovs, said:
"We are delighted to have agreed this deal with HT Media, one of
India's most influential media companies. It will mark the
successful completion of the first round of funding for our
strategic acceleration plan, providing us with an important
platform to support our future growth.
"As India's best-established affordable fashion brand, we are
resolutely focused on scaling the business to leverage our
competitive advantages in what is the world's fastest growing
economy."
For further information please contact:
Media enquiries:
Headland
Lucy Legh / Rob Walker Tel: +44 (0)20 3805
/ Charlie Twigg 4822
Koovs plc
Mary Turner/Robert Pursell Tel: +44 (0)20 7151
0170
Peel Hunt LLP
Dan Webster / George Tel: +44 (0) 20
Sellar 7418 8900
Jock Maxwell Macdonald
(ECM)
About Koovs
Koovs achievements since IPO in 2014
Koovs sells affordable western fashion in India online. In the
four years since its IPO in London, the Company has succeeded in
establishing:
-- Significant and growing social media following and customer engagement
o 2.4 million followers including 1.9 million on Facebook and 500,000 on Instagram
-- A leading brand that is fashion-forward and affordable
o Recent RedSeer survey showed that Koovs continues to
outperform other platforms on product variety and quality
-- A technology platform delivering seamless customer experience
o In FY17 Koovs implemented the latest modular microservices
architecture to deliver scalable performance, rapid technology
development and innovation
-- Koovs' own label and designer collaborations already leading fashion trends in India
o 40% of FY17 sales were Koovs Private Label, and four exclusive
collections were launched with Manish Arora, Hattie Stewart, Gauri
& Nainika and Henry Holland
-- Highly experienced Management team
o Over 125 years' combined retail and technology experience
-- First class logistics and lead times
o Average 'order to delivery' time in January 2018 was 3.5 days
compared to average of over 4 days amongst India e-tailers
-- Industry-leading customer care metrics
o Forrester survey ranked Koovs No.1 for "Best Customer
Experience" among online-only retailers in India and RedSeer
awarded Koovs the highest Net Promoter Score amongst peers
o Over GBP70 million invested in Koovs to date establishing
itself as leading affordable fashion brand in India
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END
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