Waheed Alli, founder of Indian online fashion company, Koovs Plc, has acquired the business and assets of Koovs from the administrators. The company was placed into administration after its largest shareholder, Future Lifestyle Fashions Limited (FLFL) failed to fulfil a contractual commitment to invest a further 6.8 million pounds into the company. Agreement with FLFL, part of Indian retail company Future Group; was approved by shareholders on June 25, 2019.
Commenting on the development, Waheed Alli said: “It is always tough building a business, particularly when it is in a new and developing market. I deeply regret this outcome for equity investors as a result of FLFL defaulting on its commitments. The action we’ve now taken means that Koovs and its trading subsidiary can continue to operate and that jobs, creditors and customers are protected. By leaving the rights to pursue legal action against FLFL, I hope that equity investors will be able to recover some of their losses, a process that I will also provide funding towards.”
Koovs founder rescues company out of administration
A statement from Alli said that he acquired Koovs from individuals from FRP Advisory LLP through a wholly owned vehicle, SGIK 3 Investments Ltd and that the acquisition intends to safeguard the future for employees of Koovs and employees, customers and creditors of Koovs’s operational subsidiary by continued trade without interruption. The statement said that SGIK 3 Investments has not acquired the potential right of legal action against FLFL, which the administrators will investigate as a source of recovery for shareholders.
Koovs Plc informed the market on October 21, 2019 that the expected funding from FLFL had not been received. Following this announcement, a strategic review was undertaken on behalf of the company and all options including the potential sale of the business and the identification of a new strategic investor were examined and exhausted. At a board meeting on December 10, 2019, the company concluded that it would not be possible to deliver a viable solution and had no option but to place Koovs Plc into administration.