E-commerce fashion business Koovs has entered into a new binding agreement with India-based fashion retail chain Future Lifestyle Fashions (FLFL).

As part of this agreement, FLFL will invest £10.5m ($13.65m) into Koovs. The blended investment price by FLFL is 15 pence per new ordinary share of Koovs.

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FLFL entered a conditional agreement to acquire 29.9% stake, in July last year. Koovs also revealed plans to raise up to £10m of equity at a price of 15p per share.

This new agreement replaces a subscription agreement signed by FLFL, on 27 September 2018, to invest additional funds between £9.5m to £10.5m in Koovs.

“We remain convinced of the long term potential for the Indian online fashion market and for Koovs in particular.”

The latest funding will be provided in two tranches. The first tranche of funding will see FLFL subscribe £3.66m for 45,839,063 new ordinary shares. FLFL will hold 25.8% of Koovs’s then enlarged share capital.

The deal is expected to provide synergies across the value chain including manufacturing, distribution, market reach, marketing and customer engagement.

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Koovs CEO Mary Turner said: “With the full amount of the new funds now confirmed, subject to shareholder approval, and the strategic partnership with FLFL already demonstrating value to both parties, we remain convinced of the long term potential for the Indian online fashion market and for Koovs in particular.”

FLFL will also invest the remaining amount of £6.81m for 24,010,937 compulsorily convertible preference shares instrument, in the second tranche. The investment is subject to shareholder approval.

The companies are also working on various key projects and activities, including an agreement signed by Koovs subsidiary, in March this year, to develop and maintain an online platform for FLFL’s Brand Factory retail format.