Online retailer Koovs on brink of administration after failing to secure £6.5m funding
India-focused online retailer Koovs announced it has applied for administration this afternoon after its biggest shareholder Future Lifestyle Fashions refused to invest an additional £6.5m into the company.
London-listed Koovs saw its shares suspended today after it announced had been unable to secure alternative funding.
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In an update to the market this afternoon the board said it expected the business and assets of Koovs to be bought out of administration by Waheed Alli, the company’s largest secured creditor, to allow it to continue operating.
In November the fashion group said it was in discussions with Future Lifestyle Fashions, a subsidiary of India’s largest retailer Future Group, to secure a £6.5m investment.
At the time, Koovs said the shareholder was in the process of applying for approval of the investment from the Reserve Bank of India, but said it was “committed to honouring the investment”.
It also warned shareholders that it had cash reserves of £2.2m and an insolvency could be imminent if no additional funding was secured.
In November’s statement Koovs said: “As noted previously, the Board has implemented certain cash conservation measures, primarily in relation to reducing stock purchases and marketing spend, with the intention of ensuring there is the maximum time available for the various options available to the company to be considered.
“Shareholders should be aware that in the event that the Company is unable to secure the further funding from Future Lifestyle Fashions or through alternative sources, it may no longer be able to trade as a going concern.”
Main image credit: Screenshot/Koovs