TIDMKOOV
RNS Number : 6934L
Koovs PLC
21 July 2017
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.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE OR FORM PART OF AN OFFER OF OR INVITATION TO SELL OR
ISSUE OR ANY SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR
ANY SECURITIES IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR
SOLICITATION IS UNLAWFUL NOR SHALL THIS ANNOUNCEMENT (OR ANY PART
OF IT) OR THE FACT OF ITS DISTRIBUTION FORM THE BASIS OF, OR BE
RELIED UPON IN CONNECTION WITH, OR ACT AS AN INDUCEMENT TO ENTER
INTO, ANY CONTRACT OR COMMITMENT TO DO SO. ANY FAILURE TO COMPLY
WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE
APPLICABLE SECURITIES LAWS IN SUCH JURISDICTIONS. THIS ANNOUNCEMENT
DOES NOT CONSTITUTE A PROSPECTUS FOR THE PURPOSES OF THE PROSPECTUS
RULES AND HAS NOT BEEN, AND WILL NOT BE, APPROVED BY OR FILED WITH
THE FINANCIAL SERVICES AUTHORITY.
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS INSIDE
INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION
596/2014.
Capital Raising Update - Proposed Funding up to GBP18.9
Million
Introduction
Koovs plc ("Koovs", the "Company" and, together with its
subsidiary undertakings, the "Group") (AIM: KOOV.L), the
fashion-forward business focused on the young Indian e-commerce
market, today announces an update on its intention to raise capital
as previously announced on 22 May 2017.
The Company announces that it proposes to raise up to GBP18.9
million via the issue of secured convertible loan notes (the
"Convertible Loan Notes"), the key terms of which are described
below.
The Company has entered into non-binding heads of terms under
which certain investors have indicated interest in acquiring
approximately GBP8.9 million of Convertible Loan Notes, including
GBP7.4 million from Lord Waheed Alli, a director of the Company.
The subscription by Lord Waheed Alli and a further investor will,
subject to the agreement of the terms of the transaction, amount to
related party transactions for the purposes of the AIM Rules for
Companies. Further information will be announced in due course.
The Company has also received a strong indication of interest
for a further GBP7.5 million of Convertible Loan Notes, which the
Company will seek to finalise in due course, and has the potential
to secure up to a further GBP2.5 million.
The Company will therefore seek shareholder approval for the
issuance of the total GBP18.9 million of Convertible Loan Notes,
and will likely issue the Convertible Loan Notes in two
tranches.
The net proceeds of the total fundraising will be used by Koovs
to fund the delivery of its strategic objectives and will primarily
be invested in marketing to continue to build brand awareness and
further enhance customer acquisition growth.
With the proposed initial funding, together with the positive
gross margins now being generated by the Company, the Directors
believe the Company has the resources to continue to execute its
strategic plan and the time required to close its remaining funding
requirement.
Lord Waheed Alli, Chairman of Koovs, commented:
"In a short space of time, Koovs has established a track record
of superior growth in India's booming e-commerce market. The strong
financial and operational progress the company has made to date
means it is now better placed than ever to capitalise on the unique
growth opportunity that India's fashion e-commerce market
presents.
"I am therefore delighted to lend my support to this
fundraising.
"I am extremely excited by Koovs' growth prospects and I am
confident that its strategy, exceptionally talented team and the
investments we are making, will enable the Company to further
outperform the market in which we operate, delivering strong
returns for all shareholders."
Mary Turner, Chief Executive Officer of Koovs, commented:
"Koovs has a unique and distinctive brand position, famous for
affordable western fashion, targeting the aspirational,
style-conscious young Indian consumer in a market that is forecast
to grow five-fold to $3.5 billion by 2020.
"The additional capital will enable us to continue to build on
the strong year on year growth of 87 per cent. achieved in FY17 and
deliver our strategy to become India's number one western fashion
destination by 2020."
Details of Fundraising
The Company (subject to applicable laws and regulations), has
the flexibility to meet additional demand from invited subscribers
(who are eligible (see section headed "Eligibility" below)) wishing
to participate in the Convertible Loan Notes. The period to
participate in the Convertible Loan Notes commences on the date of
this announcement until 1.00 p.m. on Monday 24 July 2017 (the
"Close Date"). The Company may choose to accept or reject
applications, either in whole or in part, on the basis of
allocations determined at its discretion and may scale down any
applications for this purpose on such basis as it may determine or
be directed.
The Company also reserves the right to meet demand for the total
GBP18.9 million fundraising via a placing of ordinary shares of one
penny each in the capital of the Company ("Ordinary Shares")
through Peel Hunt, alongside the Convertible Loan Notes
subscription (the "Placing"). The Placing could either be conducted
on the timetable set out above for the initial tranche of the
Convertible Loan Notes or in conjunction with a second tranche in
due course.
Shortly following the Close Date, the Company expects to publish
a shareholder circular in connection with the Convertible Loan
Notes, seeking shareholder authority, among other things, to (i)
allot or grant rights to subscribe for, or to convert security
into, Ordinary Shares up to the full GBP18.9 million plus estimated
accrued interest in connection with the issue of Convertible Loan
Notes; and (ii) to disapply Shareholders' statutory pre-emption
rights in connection therewith.
Eligibility
In order to ensure that the Convertible Loan Notes and the
Placing fall within the prospectus exemption, both the Convertible
Loan Notes and the Placing are only open to invited subscribers who
are both Qualified Investors (as defined in the section headed
"Important Notes" below) and persons to whom a financial promotion
may lawfully be made. Persons who do not fall within these
catergories will not be eligible to acquire either Convertible Loan
Notes or Placing Shares. The Company and Peel Hunt LLP reserve the
right to reject any applications received in respect of Convertible
Loan Notes and/or Placing Shares from persons who are not both
Qualified Investors and persons to whom a financial promotion may
lawfully be made. For further details of eligibility please refer
to the section headed "Important Notes" below.
Details on the Convertible Loan Notes
The key terms of the Convertible Loan Notes are as follows:
Maximum Nominal GBP GBP18.9 million
Amount of
Convertible
Loan Notes
to be issued
----------------- ------------------------------------------------------------------
Term 24 months from completion of the
issue of the Convertible Loan Notes
----------------- ------------------------------------------------------------------
Conversion The Convertible Loan Notes can be
Price converted into Koovs Ordinary Shares
at a conversion price of GBP0.40
per share
----------------- ------------------------------------------------------------------
Redemption The Convertible Loan Notes can be
redeemed:
* at the election of the noteholders following a
material breach by the Company of the terms of the
Convertible Loan Note instrument;
* automatically on the occurrence of certain insolvency
events; and
* otherwise, automatically at the end of the two year
term
----------------- ------------------------------------------------------------------
Conversion The Convertible Loan Notes can be
Rights fully converted at any time by the
debenture holder giving to the Company
3 months' prior written notice
----------------- ------------------------------------------------------------------
Security All amounts falling due under the
Convertible Loan Notes will be secured
by a debenture constituting a first-ranking
fixed and floating charge over all
the assets of the Company (the "Debenture")
----------------- ------------------------------------------------------------------
Coupon & Payment 3 month sterling LIBOR + 6% per annum,
calculated monthly and rolled up
(but not compounded) with payment
at the end of the Term unless previously
converted, in which case accrued
interest is paid in kind in Ordinary
Shares at the Conversion Price or
at the point of conversion.
----------------- ------------------------------------------------------------------
Conversion The Company will have the right to
by the Company require the holder to convert the
Convertible Loan Notes into equity
at the Conversion Price if:
a) During the Term the 3 month volume
weighted average price of Koovs Ordinary
Shares is equal to, or in excess
of, GBP0.75; or
b) At the end of the Term if the
5 day volume weighted average price
of Koovs Ordinary Shares is equal
to, or in excess of, GBP0.45.
----------------- ------------------------------------------------------------------
"Most Favoured Following the issue of the Convertible
Nation" basis Loan Notes, if the Company proposes
to issue any convertible debt securities
or instruments ("New Convertibles")
on terms as to either the Coupon
or the Conversion Price that are
more favourable to subscribers of
the New Convertibles than to the
holders of the Convertible Loan Notes,
the holders of the Convertible Loan
Notes shall have the right to require
the Company to amend the terms of
the Convertible Loan Notes so as
to be at least equivalent in those
aspects to the New Convertibles subject
in all cases to all requisite approvals
from shareholders and regulatory
authorities.
----------------- ------------------------------------------------------------------
For further information
please contact:
Koovs plc Tel: +44 (0)20 7151 0170
Robert Pursell
Peel Hunt LLP Tel: +44 (0)20 7418 8900
Dan Webster / George Sellar
/
Jock Maxwell Macdonald
(ECM) Tel: +44 (0)20 3805 4822
Headland
Lucy Legh / Rob Walker
IMPORTANT NOTICES
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
CAPITAL RAISING. THIS ANNOUNCEMENT IS DIRECTED ONLY AT PERSONS
WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING,
MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR
THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE
IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER
STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS
DEFINED IN ARTICLE 2(1)(e) OF DIRECTIVE 2003/71/EC AS AMED,
INCLUDING BY THE 2010 PROSPECTUS DIRECTIVE AMING DIRECTIVE
(DIRECTIVE 2010/73/EC) AND TO THE EXTENT IMPLEMENTED IN THE
RELEVANT MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); (2) IF IN THE
UNITED KINGDOM, QUALIFIED INVESTORS WHO (A) FALL WITHIN ARTICLE
19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL
PROMOTION) ORDER 2005, AS AMED (THE "ORDER") (INVESTMENT
PROFESSIONALS) OR (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET
WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER
(ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT
PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON
OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS
DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS
LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH
THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT
DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY
SECURITIES IN KOOVS PLC.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMED (THE
"SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF
ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE
OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE
BEING OFFERED AND SOLD ONLY (I) OUTSIDE OF THE UNITED STATES IN
"OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE
WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN
ACCORDANCE WITH APPLICABLE LAWS, AND (II) IN THE UNITED STATES TO A
LIMITED NUMBER OF "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN TRANSACTIONS EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT. NO PUBLIC OFFERING OF THE
PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.
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 OR 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.
The distribution of this Announcement and/or the Placing and/or
issue of the Placing Shares and/or the issue of Convertible Loan
Notes in certain jurisdictions may be restricted by law. No action
has been taken by the Company, Peel Hunt LLP or any of their
respective affiliates, agents, directors, officers or employees
that would permit an offer of the Placing Shares or Convertible
Loan Notes or possession or distribution of this Announcement or
any other offering or publicity material relating to such Placing
Shares or Convertible Loan Notes in any jurisdiction where action
for that purpose is required. Persons into whose possession this
Announcement comes are required by the Company and Peel Hunt to
inform themselves about and to observe any such restrictions.
This Announcement or any part of it 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 the United
States (including its territories and possessions, any state of the
United States and the District of Columbia (the "United States" or
the "US")), Australia, Canada, Japan or the Republic of South
Africa or any other jurisdiction in which the same would be
unlawful. No public offering of the Placing Shares or Convertible
Loan Notes is being made in any such jurisdiction.
All offers of the Placing Shares and Convertible Loan Notes will
be made pursuant to an exemption under the Prospectus Directive
from the requirement to produce a prospectus. In the United
Kingdom, this Announcement is being directed solely at persons in
circumstances in which section 21(1) of the Financial Services and
Markets Act 2000 (as amended) does not apply.
The Placing Shares and Convertible Loan Notes have not been
approved or disapproved by the US Securities and Exchange
Commission, any state securities commission or other regulatory
authority in the United States, nor have any of the foregoing
authorities passed upon or endorsed the merits of the Placing or
the accuracy or adequacy of this Announcement. Any representation
to the contrary is a criminal offence in the United States. The
relevant clearances have not been, nor will they be, obtained from
the securities commission of any province or territory of Canada,
no prospectus has been lodged with, or registered by, the
Australian Securities and Investments Commission or the Japanese
Ministry of Finance; the relevant clearances have not been, and
will not be, obtained for the South Africa Reserve Bank or any
other applicable body in the Republic of South Africa in relation
to the Placing Shares and the Convertible Loan Notes, and the
Placing Shares and the Convertible Loan Notes have not been, nor
will they be, registered under or offered in compliance with the
securities laws of any state, province or territory of Australia,
Canada, Japan or the Republic of South Africa. Accordingly, the
Placing Shares and the Convertible Loan Notes may not (unless an
exemption under the relevant securities laws is applicable) be
offered, sold, resold or delivered, directly or indirectly, in or
into Australia, Canada, Japan or the Republic of South Africa or
any other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees)
who have a contractual right or other legal obligations to forward
a copy of this Announcement should seek appropriate advice before
taking any action.
This Announcement may contain and the Company may make verbal
statements containing "forward-looking statements" with respect to
certain of the Company's plans and its current goals and
expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results.
Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "seek", "may", "could", "outlook" or other words
of similar meaning. By their nature, all forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances which are beyond the control of the Company,
including amongst other things, United Kingdom domestic and global
economic business conditions, market-related risks such as
fluctuations in interest rates and exchange rates, the policies and
actions of governmental and regulatory authorities, the effect of
competition, inflation, deflation, the timing effect and other
uncertainties of future acquisitions or combinations within
relevant industries, the effect of tax and other legislation and
other regulations in the jurisdictions in which the Company and its
respective affiliates operate, the effect of volatility in the
equity, capital and credit markets on the Company's profitability
and ability to access capital and credit, a decline in the
Company's credit ratings; the effect of operational risks; and the
loss of key personnel. As a result, the actual future financial
condition, performance and results of the Company may differ
materially from the plans, goals and expectations set forth in any
forward-looking statements. Any
forward-looking statements made in this Announcement by or on
behalf of the Company speak only as of the date they are made.
Except as required by applicable law or regulation, the Company
expressly disclaims any obligation or undertaking to publish any
updates or revisions to any forward-looking statements contained in
this Announcement to reflect any changes in the Company's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
Peel Hunt LLP is authorised and regulated by the Financial
Conduct Authority (the "FCA") in the United Kingdom and is acting
exclusively for the Company and no one else in connection with the
Capital Raising, and Peel Hunt LLP will not be responsible to
anyone (including any Placees) other than the Company for providing
the protections afforded to its clients or for providing advice in
relation to the Capital Raising or any other matters referred to in
this Announcement.
No representation or warranty, express or implied, is or will be
made as to, or in relation to, and no responsibility or liability
is or will be accepted by the Peel Hunt LLP or by any of its
affiliates or agents as to, or in relation to, the accuracy or
completeness of this Announcement or any other written or oral
information made available to or publicly available to any
interested party or its advisers, and any liability therefor is
expressly disclaimed.
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.
The price of shares and any income expected from them may go
down as well as up and investors may not get back the full amount
invested upon disposal of the shares. Past performance is no guide
to future performance, and persons needing advice should consult an
independent financial adviser.
The Placing Shares to be issued pursuant to the Placing will not
be admitted to trading on any stock exchange other than the London
Stock Exchange.
The Convertible Loan Notes to be issued pursuant to the Capital
Raising will not be admitted to trading on any stock exchange.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEURAKRBKABUAR
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