Placing to raise £7 million
11 July 2019
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS RESTRICTED AND IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR AUSTRALIA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL
Placing to raise £7 million
Sosandar PLC (AIM: SOS), the online women's fashion brand, is pleased to announce that it has raised £7 million (before commissions and expenses) through a conditional institutional placing of new Ordinary Shares at a price of 15 pence per new Ordinary Share. The Placing Price is a 3.4 per cent. premium to the closing mid-market price per Ordinary Share on 10 July 2019, being the last dealing day prior to the announcement of the Placing.
The Placing is comprised of a firm placing of 22,669,384 new Ordinary Shares and a further placing of 23,997,316 new Ordinary Shares which is conditional, inter alia, on Shareholder approval. The Placing, which was significantly oversubscribed by new and existing shareholders, was arranged by the Company's broker, Shore Capital, as agent for the Company. A Circular convening the General Meeting to approve the Conditional Placing and a Form of Proxy are expected to be posted to Shareholders later today and are available on the Company's website www.sosandar-ir.com.
Defined terms used in this announcement are defined and explained at the end of this announcement in the section headed "Definitions".
Ali Hall and Julie Lavington, Co-CEOs, commented:
"We are very pleased to have successfully raised £7 million through a significantly oversubscribed placing, with both new and existing shareholders showing their support for the business and our growth plans.
Our strong financial performance and high level of repeat orders demonstrates the demand for our products and loyalty of our existing customer base. We have considerable momentum in the business which we are excited to build on going forward. Several opportunities are in the pipeline which will further improve the Sosandar shopping experience and build awareness of the brand to new customers. We look forward to updating all shareholders on our progress in due course."
Background to and reasons for the Placing
On 3 July 2019, the Company announced its financial results for the year ended 31 March 2019, reporting, inter alia, a 228 per cent. increase in revenue and a 224 per cent. growth in orders. Given the continued strong performance of the Company, the Board believes that it is appropriate to raise additional equity to help support and accelerate further growth.
Use of proceeds from the Placing
The net proceeds of the Placing are expected to be used as follows:
- to support working capital expansion in the business, including:
- enabling the Company to pursue new opportunities, e.g. the Company is in discussions to sell on third party sites, however to work with them the Company expects it would need to stock up on selected lines and would only be paid in arrears;
- assisting in the expansion of new supplier relationships and reducing the risk of having to rely on supplier credit to fund future growth, particularly given the current supplier credit backdrop; and
- further widening the Company's product range to better serve its target consumers' fashion needs; and
- further expenditure on new customer acquisition, which the Board believes will contribute to future revenue growth given the Company's current repeat order performance. In Q1 FY20, the Company's repeat orders increased 122 per cent. year on year.
Current trading and prospects
The Company announced its financial results for the year ended 31 March 2019 on 3 July 2019, in which Ali Hall and Julie Lavington made the following comments on the Company's current trading and prospects:
"The new financial year has started strongly and in line with our expectations with June setting a new record for the number of units sold in a month. Repeat orders for Q1 increased 122 per cent. year on year and Q1 has seen c.23 per cent. year on year revenue growth. This revenue growth has been achieved through strong repeat business with deliberately less emphasis on new customer acquisition as external factors resulted in a tougher acquisition environment."
"With a clear growth plan, we are confident in the outlook for the year and very excited about Sosandar's long term prospects."
The Company's annual report and accounts can be read in full on its website at http://www.sosandar-ir.com/archive/reports/Annual-Report-2019.pdf
No assurance has been obtained from HMRC or any other person that a subscription for Ordinary
Shares in the Company is a "qualifying holding" for the purpose of investment by investors under the EIS Legislation.
The status of the Ordinary Shares as a qualifying holding for EIS purposes will be dependent on a number of factors, including that the Company is a "qualifying company" and the Company carries on a "qualifying trade" for EIS purposes.
None of the Company nor any of the Directors nor any of the Company's officers, employees, agents or advisers gives any warranty, representation or undertaking that any EIS investment in the Company is a qualifying holding for the purposes of EIS (or, in the event that it is deemed to be a qualifying holding as at Admission, that it will remain so). The Company does not give any guarantee, undertaking or other assurance that it conducts or will conduct its business in a way which ensures that the Company will meet the requirements of the EIS Legislation or that if it does it will continue to do so. The Company has obtained no assurance from HMRC that any EIS relief may be, is or will continue to be available to the participants in the EIS Placing or any other person and any and all liability in this regard is disclaimed in respect of the Directors, the Company and its officers, employees, agents and advisers.
Investors considering making a qualifying EIS investment are required to seek their own professional advice in order that they may fully understand how the EIS Legislation may apply in their individual circumstances.
No assurance has been obtained from HMRC or any other person that a subscription for Ordinary
Shares in the Company is a "qualifying holding" for the purpose of investment by VCTs.
The status of the Ordinary Shares as a qualifying holding for VCT purposes will be dependent on a number of factors, including that the Ordinary Shares are "eligible shares" and a "qualifying holding" for VCT purposes.
None of the Company nor any of the Directors nor any of the Company's officers, employees, agents or advisers gives any warranty, representation or undertaking that any VCT investment in the Company is a
qualifying holding (or, in the event that it is deemed to be a qualifying holding as at Admission, that it will remain so). The Company does not give any guarantee, undertaking or other assurance that it conducts or will conduct its business in a way which ensures that the Company will meet the requirements of the VCT Legislation. The Company has obtained no assurance from HMRC or any other person that any VCT relief may be, is or will continue to be available to the participants in the VCT Placing or any other person and any and all liability in this regard is disclaimed in respect of the Directors, the Company and its officers, employees, agents and advisers.
VCTs considering making a qualifying VCT investment are required to seek their own professional advice in order that they may fully understand how the relief legislation may apply in their individual circumstances.
Details of the Placing
The Firm Placing Shares and the Conditional Placing Shares have been placed with new and existing investors at a price of 15 pence per Placing Share. The Placing is expected to raise, in aggregate, £7 million (before commissions and expenses).
The Placing Shares, when issued, will represent approximately 28.7 per cent. of the Company's Enlarged
Share Capital immediately following Admission. Assuming that the Resolutions are passed at the General
Meeting, it is expected that the Placing Shares will be admitted to trading on AIM on 31 July 2019.
The Firm Placing (which is not being underwritten) is conditional, amongst other things, upon:
a) The Placing Agreement becoming or being declared unconditional in all respects in relation to the Firm Placing Shares (save for Admission) and not having been terminated in accordance with its terms in respect of Firm Placing Shares prior to Admission; and
b) Admission of the Firm Placing Shares becoming effective on or before 8.00 a.m. on 31 July 2019 or such later date as the Company and Shore Capital may agree, being no later than 8.00 a.m. on 31 August 2019.
The Conditional Placing (which is not being underwritten) is conditional, amongst other things, upon:
a) The Placing Agreement becoming or being declared unconditional in all respects in relation to the Conditional Placing Shares (save for Admission) and not having been terminated in accordance with its terms in respect of Conditional Placing Shares prior to Admission;
b) The passing of the Resolutions set out in the Notice of General Meeting; and
c) Admission of the Conditional Placing Shares becoming effective on or before 8.00 a.m. on 31 July 2019 or such later date as the Company and Shore Capital may agree, being no later than 8.00 a.m. on 31 August 2019.
Given the above conditions to the Placing, if the Conditional Placing is not approved by Shareholders at the GM, then the Firm Placing will, assuming its conditions are satisfied, complete without the Conditional Placing.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, Shore Capital has conditionally agreed to use its reasonable endeavours, as agents for the Company, to procure subscribers for the Placing Shares at the Placing Price with certain institutional and other investors.
The Placing Agreement contains customary warranties from the Company in favour of Shore Capital in relation to, inter alia, the accuracy of the information in this announcement and Circular and other matters relating to the Group and its business. In addition, the Company has agreed to indemnify Shore Capital in relation to certain liabilities they may incur in respect of the Placing. Shore Capital has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event of a material breach of the warranties given in the Placing Agreement, the failure of the Company to comply in any material respect with its obligations under the Placing Agreement or the occurrence of certain force majeure events which in Shore Capital's opinion makes it impractical or inadvisable to continue with the Placing.
Settlement and dealings
Applications will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and dealings in the Placing Shares will commence on AIM on 31 July 2019, with admission of the Conditional Shares also subject to the passing of the Resolutions at the General Meeting.
The Directors do not currently have sufficient shareholder authorities to allot the Conditional Placing Shares and accordingly, the Board is seeking the approval of Shareholders to allot the Conditional Placing Shares.
A Notice of General Meeting is expected to be sent with the Circular to Shareholders convening the General Meeting to be held at the Company's offices on 29 July 2019 at 11.00 a.m., at which the Resolutions will be proposed as ordinary or special resolutions as set out below:
1. an ordinary resolution to grant the Directors authority to allot the Conditional Placing Shares pursuant to the Placing; and
2. a special resolution to disapply pre-emption rights granted under the Act in respect of the allotment of the Conditional Placing Shares for cash pursuant to the Conditional Placing.
The Company's issued share capital following Admission
Following Admission of the Placing Shares, the Company's enlarged issued share capital will comprise 162,856,358 Ordinary Shares. The Company has no shares in treasury. This figure of 162,856,358 Ordinary Shares should be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change of their interest in, the share capital of the Company under the Disclosure Guidance and Transparency Rules of the FCA.
Expected timetable of principal events
|Announcement of the Placing and publication of the Circular||11 July|
|Latest time and date for receipt of Forms of Proxy for the By 11.00 a.m. on 25 July||By 11.00 a.m. on 25 July|
|General Meeting||11.00 a.m. on 29 July|
|Results of General Meeting announced via RNS||29 July|
|Admission, completion of the Firm Placing and Conditional Placing* 31 July and commencement of dealings in the Firm Placing Shares and Conditional Placing Shares* on AIM||31 July|
|CREST accounts credited in respect of the Firm Placing Shares and, 31 July as appropriate, the Conditional Placing Shares held in Uncertificated Form||31 July|
|*The Conditional Placing will only complete, and Admission in respect of the Conditional Placing Shares will only take effect, provided the Resolutions are passed at the GM|
|1. References to times in this announcement are to London time (unless otherwise stated).|
|2. The dates and times set out in the above timetable and in the rest of this announcement are indicative only and may be subject to change. If any such dates and times should change, the revised times and/or dates will be notified by announcement via RNS.|
Statistics relating to the Placing
|Number of Existing Ordinary Shares||116,189,658|
|Number of Placing Shares to be issued||46,666,700|
|- Number of Firm Placing Shares to be issued||22,669,384|
|- Number of Conditional Placing Shares to be issued||23,997,316|
|Enlarged Share Capital following Admission of the Placing Shares||162,856,358|
|Placing Shares expressed as a percentage of the Enlarged Share Capital||28.7 per cent.|
|Placing Price per Placing Share||15 pence|
|Gross proceeds of the Placing||£7.0 million|
|"2018 AGM"||the annual general meeting of the Company held on 19 September 2018;|
|"Act"||the Companies Act 2006 (as amended from time to time);|
|"Admission"||admission of the Firm Placing Shares and/or the Conditional Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules;|
|"AIM"||AIM, a market operated by the London Stock Exchange;|
|"AIM Rules"||the AIM Rules for Companies published by the London Stock Exchange (as amended from time to time);|
|"Circular"||the Shareholder circular which is expected to be sent to Shareholders later today in connection with the Placing and convening the GM;|
|"Company" or "Sosandar"||Sosandar plc, a company incorporated and registered in England and Wales with registered number 05379931;|
|"Conditional Placing"||subject to receiving shareholder approval at the GM, the placing of the Conditional Placing Shares at the Placing Price on behalf of the Company pursuant to the Placing Agreement;|
|"Conditional Placing Shares"||the 23,997,316 new Ordinary Shares to be issued and allotted by the Company pursuant to the Conditional Placing, of which 105,890 new Ordinary Shares will be EIS Placing Shares, 14,974,306 new Ordinary Shares will be VCT Placing Shares and 8,917,120 new Ordinary Shares will be Non-EIS/VCT Placing Shares;|
|"CREST"||the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in those regulations) which facilitates the transfer of title to shares in Uncertificated Form;|
|"CREST Regulations"||the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755) as amended from time to time;|
|"Directors" or "Board"||the directors of the Company or any duly authorised committee thereof;|
|"EIS"||Enterprise Investment Scheme under provisions of Part 5 of the Income Tax Act 2007;|
|"EIS Legislation"||the provisions of Part 5 of the Income Tax Act 2007 and sections 150A to 150C of, and Schedule 5B to, the Taxation of Chargeable Gains Act 1992 (in each case, as amended);|
|"EIS Placing"||the placing of the EIS Placing Shares;|
|"EIS Placing Shares"||the new Ordinary Shares to be issued and allotted by the Company pursuant to the Placing to investors seeking to benefit from the tax advantages under the EIS Legislation;|
|"Enlarged Share Capital"||the sum of the Existing Ordinary Shares and the Placing Shares;|
|"EU" or "Europe"||the 28 member states of the European Union;|
|"Euroclear"||Euroclear UK & Ireland Limited, the operator of CREST;|
|"Existing Ordinary Shares"||the 116,189,658 Ordinary Shares in issue at the date of this announcement;|
|"FCA"||the UK Financial Conduct Authority;|
|"Firm Placing"||the placing of the Firm Placing Shares at the Placing Price on behalf of the Company pursuant to the Placing Agreement, which is being undertaken using remaining existing shareholder authorities obtained at the 2018 AGM;|
|"Firm Placing Shares"||the 22,669,384 new Ordinary Shares to be issued and allotted by the Company pursuant to the Firm Placing, of which 100,030 new Ordinary Shares will be EIS Placing Shares, 14,145,684 new Ordinary Shares will be VCT Placing Shares and 8,423,670 new Ordinary Shares will be Non-EIS/VCT Placing Shares;|
|"Form of Proxy"||the form of proxy accompanying the Circular for use by Shareholders in connection with the General Meeting;|
|"FSMA"||the Financial Services and Markets Act 2000 (as amended from time to time);|
|"FY"||financial year ending 31 March;|
|"General Meeting" or "GM"||the general meeting of the Company to be held at the Company's offices at 40 Water Lane, Wilmslow, Cheshire, SK9 5AP at 11.00 a.m. on 29 July 2019;|
|"Group"||the Company and its subsidiaries (as defined in the Act) as at the date of this announcement|
|"HMRC"||Her Majesty's Revenue & Customs;|
|"London Stock Exchange"||London Stock Exchange plc;|
|"MAR"||means the Market Abuse Regulation (No. 596/2014);|
|"Non-EIS/VCT Placing Shares"||the new Ordinary Shares to be issued and allotted by the Company pursuant to the Placing to investors not seeking to benefit from the tax advantages under the VCT Legislation or EIS Legislation;|
|"Notice of General Meeting"||the notice convening the General Meeting which is set out at the end of the Circular;|
|"Official List"||the official list of the FCA;|
|"Ordinary Shares"||the ordinary shares of £0.001 (0.1 pence) each in the capital of the Company;|
|"Placing"||together the placing of the Firm Placing and the Conditional Placing;|
|"Placing Agreement"||the conditional agreement dated 10 July 2019 and made between (1) the Company, (2) SCC and (3) SCS in relation to the Placing, further details of which are set out in the C;|
|"Placing Price"||15 pence per Placing Share;|
|"Placing Shares"||the 46,667,700 new Ordinary Shares to be issued and allotted by the Company pursuant to the Placing, comprised of the Conditional Placing Shares and the Firm Placing Shares;|
|"Prospectus Rules"||the rules made for the purposes of Part VI of the FSMA in relation to offers of securities to the public and admission of securities to trading on a regulated market;|
|"Regulation S"||Regulation S under the Securities Act;|
|"Resolutions"||the resolutions set out in the Notice of General Meeting;|
|"Restricted Jurisdictions"||the United States, Australia, Canada, Japan, the Republic of South Africa and any other jurisdiction where the extension or availability of the Placing would breach any applicable law or regulation;|
|"RNS"||a regulatory information service operated by the London Stock Exchange as defined in the AIM Rules;|
|"SCC"||Shore Capital and Corporate Limited, the Company's nominated adviser for the purposes of the AIM Rules;|
|"SCS"||Shore Capital Stockbrokers Limited, the Company's broker for the purposes of the AIM Rules;|
|"Securities Act"||the US Securities Act of 1933, as amended;|
|"Shareholders"||holders of Ordinary Shares from time to time;|
|"Shore Capital"||SCC and/or SCS as the case may be;|
|"UK"||the United Kingdom of Great Britain and Northern Ireland;|
|"Uncertificated Form"||Ordinary Shares recorded on the share register as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred within the CREST settlement system;|
|"US" or "USA"||the United States of America, each State thereof (including the District of Columbia), its territories, possessions and all areas subject to its jurisdiction;|
|"VCT"||a company which is, or is seeking to become, approved as a venture capital trust under Part 6 of the Income Tax Act 2007;|
|"VCT Legislation"||the provisions of Part 6 of the Income Tax Act 2007 and sections 151A and 151B of the Taxation of Capital Gains Act 1992 (in each case as amended);|
|"VCT Placing"||the placing of the VCT Placing Shares; and|
|"VCT Placing Shares"||the new Ordinary Shares to be issued and allotted by the Company pursuant to the Placing to investors seeking to benefit from the tax advantages pursuant to the VCT Legislation.|
|Julie Lavington / Ali Hall, Joint CEOs||c/o Alma PR|
|Shore Capital||+44 (0) 20 7408 4090|
|Patrick Castle / Mark Percy / James Thomas|
|Alma PR Limited (Financial PR)||+44 (0) 20 3405 0205|
|Rebecca Sanders-Hewett / Susie Hudson / Sam Modlin||[email protected]|
About Sosandar PLC
Sosandar is an online womenswear brand, specifically targeted at a generation of women who have graduated from throwaway fashion and are looking for quality, affordable clothing with a premium, trend-led aesthetic. This is a section of the market that is currently being underserved.
Sosandar was launched in September 2016. The Sosandar business model is built around using trend-led, exclusive designs produced in-house and then manufactured using a variety of global suppliers. Sosandar caters for a growing market of fashion conscious women, while utilising an outsourced logistics provider that can support its planned growth over the coming years.
Sosandar's founders are Ali Hall and Julie Lavington, who previously launched and ran high street fashion magazine Look, as editor and publishing director respectively. They have a combined experience of over 35 years in the fashion industry, including in the design, manufacture and sale of fashion ranges for some of the UK's high street retailers, including Debenhams, Office, Oasis and JD Williams.
More information is available at www.sosandar-ir.com
Shore Capital and Corporate Limited, which is authorised and regulated by the FCA, acts as nominated adviser to the Company for the purposes of the AIM Rules for Companies. Shore Capital Stockbrokers Limited is a member of the London Stock Exchange and is authorised and regulated by the FCA. Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited are acting exclusively for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Shore Capital or for providing advice in relation to the Placing, or any other matters referred to in this Announcement.
This announcement has been issued by the Company and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Shore Capital or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
References in this announcement to Shore Capital refers to Shore Capital and Corporate Limited and/or Shore Capital Stockbrokers Limited as the context admits.
This announcement includes or may include forward-looking statements relating to the Company's future prospects, developments and strategies and are based on the current expectations, projections and assumptions of the directors of the Company ("Directors") and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Forward-looking statements are sometimes identified by the use of terms and phrases such as "believe", "expects", "envisage", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "continues", "assumes", "positioned", "targets" or "anticipates" or the negative thereof, variations or comparable expressions, including reference to assumptions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors or the Company relating to the Company's future prospects, developments and strategies and are based on assumptions and estimates and involve risks, uncertainties and other factors that may cause the actual results, financial condition, performance or achievements of the Company or industry results to be materially different from any future results, performance or achievement expressed or implied by such forward looking statements. No assurance can be given that such future results will be achieved. New factors may emerge from time to time that could cause the Company's business not to develop as it expects and it is not possible for the Company to predict all such factors. Each forward-looking statement contained in this announcement speaks only as of the date of the particular statement. The Company, the Directors, Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited each expressly disclaim any obligation to update these forward-looking statements contained in this announcement to reflect any change in their expectations or any change in future events or developments on which such statements are based unless required to do so by applicable law or regulation, the AIM Rules for Companies or the AIM Rules for Nominated Advisers.