Koovs PLC Capital Raise Update and Strategic Investment (2751P)

TIDMKOOV

RNS Number : 2751P

Koovs PLC

16 November 2016

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 CONTAINS INSIDE INFORMATION

Koovs plc

Koovs plc announces strategic investment from the Times of India Group (GBP3.9m) as part of a further GBP10.9m of new funding, and up to an additional GBP2m via Broker Option

This capital raise is part of the final tranche of the Company's three-year investment programme to raise approximately GBP35 million, announced in September 2015. It brings the total raised under this programme to GBP31 million to date.

Koovs plc ("Koovs", the "Company" and, together with its subsidiary undertakings, the "Group") (AIM: KOOV.L) is pleased to confirm a strategic investment in the Company of GBP3.9 million from the Times of India Group and a further GBP7 million investment by new and existing shareholders, through the issue of 21,700,000 new Ordinary Shares at 50 pence per Ordinary Share.

The Times of India Group is one of India's leading media groups, with titles including the Times of India and the Economic Times publications, as well as popular TV, radio, digital and outdoor channels.

Furthermore, the Company has firm indications of interest amounting to approximately GBP2 million of additional investment from other investors and has also authorised its broker Peel Hunt to raise up to GBP2 million through the Broker Option. The Broker Option will also be at an issue price of 50 pence per Ordinary Share and will be limited to 4 million shares, closing at 6pm on Friday 18 November 2016.

Mary Turner, Chief Executive Officer of Koovs, says:

"We are delighted to bring on board our new strategic partner in the Times of India, a leading media company, which will give us access to TV, outdoor and digital platforms in addition to print and radio and will help to incrementally extend our coverage nationwide.

Expansion of the e-commerce market in India is both rapid and significant, and Koovs is growing faster than the market rate, so this is an exciting time for us. We have a unique brand position, exclusive products and a strong following amongst India's young, aspirational, fashion conscious twenty-somethings. Securing this funding is an important milestone and a strong validation of investor confidence in our ability to deliver."

Details of fundraising

Koovs confirms GBP10.9 million new investment in the Company through the issue of 21,700,000 new ordinary shares of one penny each in the Company ("Ordinary Shares") at 50 pence per Ordinary Share (the "Issue Price") (the "Fund Raising").

The Fund Raising comprises a placing by Peel Hunt LLP ("Peel Hunt") on behalf of Koovs of 9,500,000 new Ordinary Shares at the Issue Price (the "Placing Shares") with new and existing shareholders raising GBP4.75 million (the "Placing"), and, separately, the Company will directly issue 12,200,000 new Ordinary Shares at the Issue Price (the "Subscription Shares") to new and existing shareholders raising GBP6.10 million (the "Subscriptions").

In addition, the Company has firm indications of interest amounting to approximately GBP2 million of demand at the Issue Price (the "Further Investments") from other investors and has granted an option to its broker Peel Hunt to issue up to an additional 4,000,000 new Ordinary Shares at the Issue Price to raise additional gross proceeds of up to GBP2 million ("Broker Option Shares") for the period from the date of this announcement to 6.00 p.m. on Friday 18 November 2016 to meet any additional demand from other investors including existing shareholders (the "Broker Option").

Peel Hunt is acting as nominated adviser, broker and bookrunner to the Company in connection with the Placing.

The Company has entered a placing agreement with Peel Hunt (the "Placing Agreement"). Under the terms of the Placing Agreement, Peel Hunt has placed, as agent for the Company, 9,500,000 Placing Shares with new and existing shareholders.

The Placing Agreement contains provisions (including customary market related provisions) entitling Peel Hunt, in certain circumstances, to terminate the Placing Agreement at any time prior to admission of the Placing Shares to trading on AIM becoming effective. The Placing is conditional upon, amongst other things, the Subscription Agreements (as such term is defined below) becoming unconditional in all respects and not being terminated in accordance with their terms, the admission of the Placing Shares to trading on AIM becoming effective and the Placing Agreement between the Company and Peel Hunt not being terminated in accordance with its terms.

The Company has also entered subscription agreements with certain investors (the "Subscription Agreements"). Under the terms of the Subscription Agreements these investors will be issued, in aggregate, 12,200,000 Subscription Shares. The Subscription Agreements are unconditional save for admission of the Subscription Shares to trading on AIM.

The Company will allot and issue the Placing Shares and the Subscription Shares on a non-pre-emptive basis.

The Placing Shares and Subscription Shares represent approximately 14.5 per cent of the existing issued share capital of the Company and the Issue Price represents a discount of approximately 20.6 per cent to the closing mid-market price of 63.00 pence per Ordinary Share on 15 November 2016, being the last trading day immediately preceding the publication of this announcement.

The Placing Shares and Subscription 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 Placing Shares and the Subscription Shares will be issued on a non-pre-emptive basis under the existing authorities granted to the directors at the Company's annual general meeting held on 29 September 2016.

Application will be made for the Placing Shares and the Subscription Shares to be admitted to trading on AIM. Admission and dealings in the Placing Shares and the Subscription Shares are expected to take place at 8.00 a.m. on 22 November 2016 ("Admission"). Following Admission, the Company will have 171,383,691 Ordinary Shares in issue ("Enlarged Issued Share Capital").

Details of the Broker Option

The Company has granted the Broker Option to Peel Hunt under the Placing Agreement in order to give Peel Hunt, with the agreement of the Company (and subject to applicable laws and regulations), the flexibility to meet any additional demand from other investors in the period from the date of this announcement to 6.00 p.m. on Friday 18 November 2016.

The Broker Option is exercisable on one or more occasions at any time in part or in whole prior to 6.00 p.m. on Friday 18 November 2016. Any Broker Option Shares will be issued at the Issue Price. The Broker Option may be exercised by Peel Hunt with the agreement of the Company but there is no obligation on Peel Hunt to exercise the Broker Option or to seek to procure subscribers for Broker Option Shares. The maximum number of new Ordinary Shares that may be issued pursuant to the exercise of the Broker Option is 4,000,000 new Ordinary Shares with the potential to generate gross proceeds to the Company of GBP2 million.

Application will be made for the Broker Option Shares to be admitted to trading on AIM. Admission and dealings in the Broker Option Shares (if any) is expected to take place at 8.00 a.m. on 23 November 2016.

The Broker Option Shares (if any) will be issued on a non-pre-emptive basis under the existing authorities granted to the directors at the Company's annual general meeting held on 29 September 2016.

The Placing Shares, the Subscription Shares, the Broker Option Shares (if any) and any new Ordinary Shares that may be issued in connection with the Further Investments are not being made available to the public and none of the Placing Shares, the Subscription Shares, the Broker Option Shares nor any new Ordinary Shares that may be issued in connection with the Further Investments are being offered or sold in any jurisdiction where it would be unlawful to do so.

Directors' participation and related party transactions

Lord Waheed Alli, a Director of the Company, has agreed to subscribe for 1,000,000 Subscription Shares in the Subscriptions. Following Admission, Lord Waheed Alli and his connected persons will have an interest in 38,699,218 Ordinary Shares which represent 22.6 per cent of the Enlarged Issued Share Capital.

Baroness Gail Rebuck, a Director of the Company, has agreed to subscribe for 300,000 Placing Shares in the Placing. Following Admission, Baroness Gail Rebuck and her connected persons will have an interest in 1,100,000 Ordinary Shares which represent 0.6 per cent of the Enlarged Issued Share Capital.

Dragon Asia Holdings Pte Ltd ("Dragon Asia Holdings"), holds a total of 28,000,000 Ordinary Shares representing 18.7 per cent of the existing share capital of the Company. Dragon Asia Holdings has agreed to subscribe for 500,000 Subscription Shares in the Subscriptions. Following Admission, Dragon Asia Holdings will have an interest in 28,500,000 Ordinary Shares which represent 16.6 per cent of the Enlarged Issued Share Capital.

Ruffer LLP on behalf of its clients ("Ruffer") holds a total of 16,625,000 Ordinary Shares representing 11.1 per cent of the existing share capital of the Company. Ruffer has agreed to subscribe for 2,500,000 Placing Shares in the Placing. Following Admission, Ruffer will have an interest in 19,125,000 Ordinary Shares which represent 11.2 per cent of the Enlarged Issued Share Capital.

Michinoko Limited ("Michinoko") holds a total of 15,617,805 Ordinary Shares representing 10.4 per cent of the existing share capital of the Company. Michinoko has agreed to subscribe for 4,000,000 Placing Shares in the Placing. Following Admission, Michinoko will have an interest in 19,617,805 Ordinary Shares which represent 11.4 per cent of the Enlarged Issued Share Capital.

Lord Waheed Alli, Baroness Gail Rebuck, Dragon Asia Holdings, Michinoko and Ruffer will in each case be treated as a "related party" for the purposes of Rule 13 of the AIM Rules for Companies in relation to the participation by them (or their associates) in the Subscriptions and the Placing.

The Directors (excluding Lord Waheed Alli, Anant Nahata and Baroness Gail Rebuck), having consulted with Peel Hunt in its capacity as the Company's nominated adviser for the purposes of the AIM Rules for Companies, consider the terms on which Lord Waheed Alli, Baroness Gail Rebuck, Dragon Asia Holdings, Michinoko and Ruffer will subscribe for Subscription Shares and Placing Shares in the Subscription and the Placing to be fair and reasonable insofar as shareholders are concerned.

Concert party

Dragon Asia Holdings is connected to Nextwave Ventures Pte. Ltd. ("Nextwave Ventures") and, following the subscription for new Ordinary Shares by Dragon Asia Holdings, they will together have an interest in 37,700,000 Ordinary Shares which will represent 22.0 per cent of the Enlarged Issued Share Capital. For the purposes of the City Code on Takeovers and Mergers, Anant Nahata, Exicom Tele-Systems (Singapore) Pte. Ltd., Nextwave Ventures and Dragon Asia Holdings are deemed to be a concert party shareholder in the Company (the "Concert Party"). Following completion of the Subscriptions and the Placing, the Concert Party will have an interest in 41,322,283 Ordinary Shares which will represent 24.1 per cent of the Enlarged Issued Share Capital.

Current trading

The Group continues to trade strongly and is trading in line with market expectations in respect of the current financial year.

 
 For further information, 
  please contact: 
 Koovs plc                  Tel: [phone] 
  Mary Turner / Rob          0170 
  Pursell 
 
   Peel Hunt LLP 
 Dan Webster                Tel: [phone] 
  George Sellar              8900 
  Adrian Trimmings 
  Jock Maxwell Macdonald 
  (ECM) 
 
   Brunswick Group LLP 
 Nick Claydon / Alison      Tel: [phone] 
  Kay                        5959 
 

Important Notice

The distribution of this announcement and any other documentation associated with the Fund 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 Placing Shares, the Subscription Shares, the Broker Option Shares (if any) and any new Ordinary Shares that may be issued in connection with the Further Investments (together 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. In particular, this announcement 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.

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.

Placing and Broker Option

Participation in the Placing, the Broker Option and the Further Investments (if any) will be for invited subscribers only and members of the public are not eligible to take part in the Placing, the Broker Option or the Further Investments (if any). The details of the Placing, the Broker Option and the Further Investments contained 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.

THE PLACING, THE BROKER OPTION AND THE FURTHER INVESTMENTS (IF ANY) ARE 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 AMED ("QUALIFIED INVESTORS"), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC AS AMED (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 PLACING, THE BROKER OPTION AND THE FURTHER INVESTMENTS (IF ANY) MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THE PLACING, AND/OR BROKER OPTION AND/OR THE FURTHER INVESTMENTS (IF ANY) RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. NEITHER THE PLACING, THE BROKER OPTION NOR THE FURTHER INVESTMENTS (IF ANY) CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

THE PLACING, THE BROKER OPTION AND THE FURTHER INVESTMENTS (IF ANY) WILL BE FOR INVITED RELEVANT PERSONS ONLY WHO WILL BE INVITED TO, AND WHO CHOOSE TO, PARTICIPATE IN THE PLACING AND/OR THE BROKER OPTION AND/OR THE FURTHER INVESTMENTS (IF ANY) 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 Fund Raising and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Fund 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 Fund 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 Fund 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.

This information is provided by RNS

The company news service from the London Stock Exchange

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November 16, 2016 02:00 ET (07:00 GMT)