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MySale Group proposed subscription to raise approximately £5.1 million

MySale Group plc (LON:MYSL) has announced a proposed direct subscription to raise approximately £5.1 million (approximately A$9.3 million), before expenses, through a subscription for 85,225,129 new ordinary shares in the Company at a subscription price of 6.0 pence per ordinary share by entities associated with Gabby Leibovich, Hezi Leibovich and Nati Harpaz.

Gabby Leibovich and Hezi Leibovich, founders of Catch.com.au and Nati Harpaz, the former-CEO of Catch.com.au (together the “Investors”), successfully built Catch.com.au into one of Australia’s most successful online retailers, which included an inventory business as well as a successful marketplace which had more than two million products available for Australian consumers.

The Company intends to use a proportion of the proceeds as capital investment in technology to expand and develop its marketplace platform. The Company has been taking advantage of inventory available around the world and the proceeds will enable further selective investment in inventory to continue to improve brand and inventory mix.

The Company has been cash positive for the last six months and this additional investment of A$9.3m gives total net cash in excess of A$12m to grow the business.

Details of Subscription and Total Voting Rights

The Company has entered into a Subscription Agreement with entities associated with each of the Investors pursuant to which they have agreed to subscribe for the Subscription Shares at the Subscription Price. The Subscription Agreement is conditional only upon receipt of the subscription proceeds by the Company and on Admission of the Subscription Shares to AIM.

The Subscription Shares represent 10.0% of the Company’s existing issued share capital at the date of this announcement and will represent approximately 9.1% of the Company’s enlarged issued share capital immediately following the issue of the Subscription Shares. The Subscription Shares have been issued under the Company’s existing authorities approved by shareholders at the Company’s Annual General Meeting held on 30 December 2019.

The Subscription Shares will be allotted and issued fully paid and will, on issue, rank pari passu with the existing ordinary shares. Application has been made for admission of the Subscription Shares to trading on AIM, with an anticipated admission date of 13 October 2020. Following admission of the Subscription Shares the Company’s total issued share capital will be 937,476,416 Ordinary Shares.

There are 7,542,614 ordinary shares held in treasury therefore, the total number of voting rights in the Company is 929,933,802. This figure may 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 to their interest in, the Company under the FCA’s Disclosure and Transparency Rules.

Carl Jackson, CEO of MySale Group, commented:

“We are delighted to welcome Gabby, Hezi and Nati as substantial shareholders in our business. Being able to attract investors of this calibre is extremely rewarding and is a testament to our team and the strength of our differentiated business model. This investment will further enhance MySale’s ANZ First Strategy as we seek to scale our marketplace platform with leading brands across a wide range of new categories to complement our already established international and domestic fashion, footwear, accessories and beauty categories.   

We pride ourselves on offering flexible solutions for our partners and we continue to scale the number of international partners selling on our platform, providing them with a perfect counter seasonal solution to what has been a very difficult trading period due to COVID-19.

As a business, we are well positioned to take advantage of the accelerated shift to online and, as the quality and number of partners working with us continues to grow, we stand to capitalise further from this long term structural change.

We have experienced a strong start to the year as we enter the peak trading season. During the past year we have restructured our cost base taking out significant unnecessary costs, improved the margins and are now moving to scale the business.”

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