Online fashion retailer Koovs Plc said on Tuesday a company owned by chairman Waheed Alli has acquired its business after it failed to get additional investment from billionaire Kishore Biyani-led Future Lifestyle Fashion Ltd.
Future Lifestyle, part of Biyani’s Future Group and the largest shareholder of Koovs, failed to invest an additional 6.5 million pounds ($8.34 million), the online retailer said in regulatory filings. This resulted in unsustainable cash-flow pressures, said Koovs, which is listed on the London Stock Exchange’s Alternative Investment Market.
The company said that it also failed to secure alternative funding and that it didn’t receive any viable offers in a competitive sale process conducted over the past month to help it continue as a going concern.
As a result, Koovs placed itself into administration—the UK’s insolvency process.
The filings show that Geoff Rowley and Jason Baker, partners at business advisory firm FRP Advisory, were named joint administrators. The administrators subsequently sold the company’s business and assets to SGIK 3 Investments Ltd, the company owned by Alli, Koovs’ largest secured creditor.
“The offer from SGIK 3 Investments Limited to purchase the underlying business of Koovs in the UK and in India was the best one we received from a creditors' perspective,” Rowley said. “There is a legal claim against FLFL which will be left with the administrators to try and recover value. This could potentially see a return for creditors, including shareholders, and we will provide an update in due course.”
Future Lifestyle owned a 25.8% stake in Koovs as of November 20, according to the fashion retailer’s website. HT Media Ltd owned 11.4% while Alli held 10.9%.
The Biyani-led company had acquired the stake last year for about $7.6 million. At the time, Koovs had said that Future Lifestyle would make additional investment to take its ownership to up to 29.9%.