Further to its announcement on 18 June 2018, and as also set out in the circular posted to shareholders on 16 July 2018, Koovs plc (AIM: KOOV) is pleased to announce that it has completed its agreement for a £24.0m media deal with strategic partner HT Media Limited, one of India’s largest media companies and owner of the Hindustan Times. The agreement has been updated to be over a four year period rather than a two year period (as previously announced), and also in regards to the mix of shares and cash used to satisfy the deal (further detail set out below).
The Agreement will, in aggregate, provide Koovs with £24.0m of media and advertising services from HT Media. Pursuant to the Agreement, HT Media has agreed to subscribe for £17.1m (previously £16.8m) of new ordinary shares of 1p each in the capital of the Company, and Koovs has agreed to commission further media and advertising services from HT Media for £6.9m (previously £7.2m) in cash.
The net effect of the Agreement is that, Koovs will acquire four £6.0m tranches of media from HT Media at yearly intervals over a four-year period. £4.28m of each instalment will be satisfied by the issuance of new Ordinary Shares to HT Media, with the balance of £1.72m to be acquired by Koovs in cash.
On 21 August 2018 and under the first tranche, HT Media has subscribed for 42.84m Ordinary Shares at 10p per Ordinary Share. The Subscription is conditional upon, inter alia, admission of the Subscription Shares to trading on the AIM market of the London Stock Exchange plc. Application for Admission will be made following receipt of the subscription monies from HT Media. The Company will release a further announcement in due course. Subsequent tranches will be conditional on, inter alia, the agreement of both parties and will be priced at the lower of:
- The average of the mid-market closing price per Ordinary Share of the Company for the three month period prior to the date of closure of such tranche; or
- The price per Ordinary Share received by the Company on the most recent cash fundraising of the Company closed during the three month period prior to the date of closure of such tranche.
Mary Turner, Chief Executive of Koovs, said: “We are delighted to have concluded this deal with HT Media, one of India’s most influential media companies. The Agreement will give us premium exposure in further building the Koovs brand and will provide us with an important platform to support our future growth in what is the world’s fastest growing economy.”