Koovs issues warning amid funding troubles
Indian fashion retailer Koovs has warned shareholders it may no longer be able to trade as a going concern if it fails to secure a £6.5 million funding from Future Lifestyle Fashions Limited.
Koovs is also currently considering all other financing alternatives available to it, it said in a statement on Monday.
The UK-based business inked a strategic partnership with Future Lifestyle Fashions Limited (FLFL), one of India's leading retail businesses and one of the top 10 fashion apparel companies in the world, earlier this year in a bid to expand the business.
FLFL committed to subscribe for £6.81 million in compulsorily convertible preference shares but it has currently only invested £0.25 million in Koovs.
The deal hit an obstacle in October when the Reserve Bank of India requested that FLFL reapply for approval before completing its outstanding investment.
Koovs said FLFL remains committed to honouring the investment, but warned investors about its ability to continue trading in the event that the deal falls through.
The online fashion platform added that it currently has cash reserves of approximately £2.2 million, which should be enough to see it through the current calendar year. Additionally, it has reduced stock purchases and marketing spend to support its liquidity requirements.
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