UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES
EXCHANGE ACT OF 1934
For
the month of: April 2021
Commission
File Number: 001-38544
NAKED
BRAND GROUP LIMITED
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(Translation
of registrant’s name into English)
7/35-39 William Street, Double Bay. NSW 2028, Sydney
Australia
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(Address
of Principal Executive Offices)
Indicate
by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F [X] Form
40-F [ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Completion
of Acquisition or Disposition of Assets.
As
previously disclosed, on January 21, 2021, Naked Brands Group Limited (the “Company”) announced its plans to
undertake a transformative restructure in which it will dispose of its bricks-and-mortar operations in order to focus exclusively
on its e-commerce business. To that end, the Company signed a non-binding and non-exclusive term sheet to divest itself of its
Bendon Limited (“Bendon”) subsidiary, to a group composed of existing management of the Company, including
Justin Davis-Rice, the Executive Chairman and Chief Executive Officer of the Company, and Anna Johnson, the Chief Executive Officer
of Bendon.
Upon
approval of the Company’s shareholders as described below under “Submission of Matters to a Vote of Security Holders,”
the Company entered into a conditional share sale agreement (the “Bendon Share Sale Agreement”) for the sale
of all of the issued share capital in Bendon (the “Transaction”) to JADR Holdings Pty Limited as trustee for
the JDR Family Trust No 2, an entity affiliated with Mr. Davis-Rice (the “Davis-Rice Buyer”), and Matana Intimates
Holdings Trustee Limited as trustee for the Matana Intimates Holding Trust, an entity affiliated with Ms. Johnson (the “Johnson
Buyer,” and together, the “Buyers”).
The
material terms of the Bendon Share Sale Agreement are set out below. The Bendon Share Sale Agreement is otherwise on terms that
are customary for a management buy-out agreement of this nature including the provision by the Buyer of ‘reverse warranties’
in favor of the Company.
The
Bendon Share Sale Agreement
The
key terms of the Bendon Share Sale Agreement are as follows:
Agreement
to buy and sell Bendon. Pursuant to the Bendon Share Sale Agreement, the Company sold all of the issued share capital in Bendon
together with any accrued rights free from encumbrances for the consideration described in below on the terms and conditions set
out in the Bendon Share Sale Agreement. The Transaction will have an economic close of January 31, 2021 (the “Accounts
Date”) notwithstanding that closing of the Transaction (the “Completion”) occurred on April 30, 2021.
Because
the Buyers are related parties of the Company, the Company adopted strict governance and information protocols to ensure independent
consideration and assessment of the Buyers’ proposal and the Bendon Share Sale Agreement. The independent directors of the
Company formed an independent committee of the board of directors of the Company, which considered, on behalf of the Company,
the Transaction. The consideration paid for the share capital of Bendon was determined through negotiations between the independent
committee and the Buyers.
Consideration.
The consideration paid by the Buyers was NZ$1.00 as adjusted based on the target inventory amount of NZ$18.2 million and by a
true up adjustment for estimated Net Cash/(Debt) and Working Capital as at the Accounts Date. The inventory adjustment resulted
in a payment by the Company to Bendon in the amount of NZ$4.8 million. The Net Cash/(Debt) and Working Capital adjustments are
to be prepared within 30 business days after Completion.
Exit
Event Proceeds. If the Buyers or Mr. Davis-Rice and Ms. Johnson agree to sell the shares in Bendon or its business within
three years following closing of the Transaction (the “Completion”), the Company will be entitled to the following
percentage of the net proceeds of the sale:
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in
the first year following Completion, 75%;
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in
the second year following Completion, 50%; and
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in
the third year following Completion, 25%.
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Profit
share. The Company is entitled to a tiered percentage of net profits of Bendon and the entities controlled by Bendon (the
“Bendon Group”) for three years commencing on July 1, 2021, being in:
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the
first year, 30%;
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the
second year, 20%; and
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the
third year, 10%.
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The
net profits are to be calculated on a cumulative basis so that any losses from the first or second year are offset against any
profits in a subsequent year.
FOH
Services Agreement. FOH Online Corp. (“FOH Online”), the Company’s wholly owned subsidiary, entered
into a management services agreement (the “FOH Services Agreement”) with Bendon pursuant to which Bendon will
provide the management services summarized further under “—FOH Services Agreement” below.
Forgiveness
of the Intra Group Loans. The Company forgave all inter-company debt owing by the Bendon Group to the Company and its subsidiaries
other than the Bendon Group effective as of January 30, 2021 (which is approximately NZ$40.4 million).
Naked
Facility. The Company will provide Bendon with a 5 year loan of up to NZ$7 million (the “Naked Facility”)
at an initial interest rate per annum of 5% and, following Bendon obtaining additional external senior debt which the Buyers and
Bendon are proposing to raise after Completion, an interest rate of 50 basis points above the rate of this senior debt. The Naked
Facility will also be subordinated to this senior debt. See “—Naked Facility” below.
Ms.
Johnson’s employee entitlements. The Company will, to the extent permissible under the relevant rules, pay out or settle
in cash, all of Ms Johnson’s: (a) accrued remuneration; and (b) share incentive entitlements, up to the Accounts Date.
Warranties
and indemnities. The Company has agreed to provide warranties relating to title, authority and capacity along with associated
indemnities for a breach in favor of the Buyers. Given the nature of the management buyout, the Buyers have agreed to provide
market standard ‘reverse warranties’ in favor of the Company arising from their intimate knowledge of the Bendon Group
business.
Costs.
The Company has agreed to pay up to NZ$300,000 of the Buyers’ and Bendon’s costs in relation to the Transaction, which
was agreed in exchange for the Buyers’ agreeing for the term sheet to be entered into on a non-exclusive basis.
Guarantee.
Mr. Davis-Rice and Ms. Johnson guarantee certain obligations under the Bendon Share Sale Agreement with the balance being guaranteed
post completion by Bendon.
FOH
Services Agreement
In
the current structure, Bendon performs certain services in relation to the FOH Online e-commerce business including revenue and
financial reporting, product design, inventory management, freight and logistics management, website management, customer service,
marketing and IT support (the “Bendon Services”).
As
part of the Proposed Transaction, so that the Company can continue to operate FOH Online using the existing e-commerce model,
operating and management structure without having to immediately construct a standalone infrastructure, a 5 year management services
agreement was entered between FOH Online and Bendon. Under this agreement, Bendon will provide certain management services to
FOH Online and FOH Online will reimburse Bendon for all direct and reasonable costs incurred in the performance of these services
as agreed in annual budget as well as a 5% administration fee based on monthly sales. The 5% administration fee is to cover the
actual costs of services performed by Bendon personnel.
The
other key terms of the FOH Services Agreement are as follows:
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FOH
Online may terminate for convenience by 3 months’ notice;
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Bendon
may not terminate for convenience; and
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there
are no exclusivity restrictions on either party.
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Other
than the terms outlined above, the FOH Services Agreement is on terms customary for an agreement of this nature.
Naked
Facility
As
part of the Transaction, the Company entered into a facility agreement (the “Facility Agreement”) for the Naked
Facility. Under the Naked Facility, the Company will advance to Bendon an amount of up to NZ$7 million which will be guaranteed
by the Australian and New Zealand entities in the Bendon Group and secured by all-asset security over their assets. No advances
have been made as of the date of this report.
The
Company has agreed that the Naked Facility will be subordinated to an additional loan which Bendon will be seeking from a third
party lender, following Completion (the “Senior Debt”). Until such time as the Senior Debt has been obtained,
the interest payable on the Naked Facility will be charged at a fixed rate of 5%. Following Bendon obtaining the Senior Debt,
the interest rate will change to the rate that is 50 basis points higher than the rate agreed under the Senior Debt.
The
loan has a fixed term of 5 years which may be repaid early in accordance with the Facility Agreement but may not be redrawn by
Bendon.
Standard
default provisions apply under the Facility Agreement if Bendon or its guarantors fails to repay or observe the terms of the Facility
Agreement.
Consulting
Agreement with Mr. Davis-Rice
In
connection with the Completion, JADR Consulting Group Pty Ltd, an entity controlled by Mr. Davis-Rice (“JADR Consulting”),
and the Company entered into a consultant service agreement (the “Consultant Agreement”), pursuant to which
JADR Consulting agreed to make Mr. Davis-Rice available to serve as Chief Executive Officer and Chairman of the Company. The Consultant
Agreement has a term of 2 years. On the date 12 months prior to the end of the existing term, the Consultant Agreement will be
automatically extended by a further 2 years unless prior to such date either party gives written notice to the other party that
the term will not be extended.
As
compensation for the services, the Company will pay JADR Consulting US$500,000 per year. JADR Consulting also may be awarded bonuses
as agreed with the board of directors of the Company from time to time. The Company also will reimburse JADR Consulting for expenses
reasonably incurred in connection with the services.
Either
party may immediately terminate the Consultant Agreement if the other party material breaches the Consultant Agreement and the
breach is not curable or is not cured within 10 business days’ after written notice. The Company may terminate the Consultant
Agreement at any time, without cause, on 12 months’ written notice (in lieu of all or part of the notice period, the Company
may pay JADR Consulting the fees owed during the remainder of such notice period). In addition, either party may terminate the
Consultant Agreement upon the insolvency of the other party.
The
Consultant Agreement includes provisions vesting in the Company all rights to any intellectual property created in connection
with the services and protecting the Company’s confidential information.
Submission
of Matters to a Vote of Security Holders.
As
previously disclosed, at 10:00 a.m. Sydney time on April 23, 2021 (8:00 p.m. New York time on April 22, 2021), the Company held
an Extraordinary General Meeting of Shareholders (the “EGM”). Under the Company’s constitution and Australian
law, a quorum was present. The sole item of business presented to the shareholders at the EGM was the consideration of an ordinary
resolution to approve the giving of financial benefits to related parties of the Company (Mr. Davis-Rice and Ms. Johnson) in connection
with the Transaction. The preliminary tabulation of the votes cast for and against the proposal was previously disclosed in a
Report of Foreign Private Issuer on Form 6-K filed on April 23, 2021.
The
final tabulation of votes cast for and against the proposal, as well as the number of abstentions and broker non-votes with respect
to the proposal, is as follows:
For
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Against
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Abstain
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Broker Non-Vote
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118,588,762
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2,076,175
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776,405
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—
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On
April 30, 2021, the Company issued a press release announcing the final tabulation of votes from the EGM, the signing of the Sale
Agreement and the closing of the Transaction. The press release is attached to this report as an exhibit and is incorporated herein
by reference.
The
information contained in this Form 6-K, including the exhibits hereto, shall be incorporated by reference in the Company’s
registration statements on Form F-3 and F-1 (File Nos. 333-226192, 333-230757, 333-232229, 333-235801, 333-243751, 333-249490,
333-249547 and 333-254245) and the prospectuses included therein.
Exhibits
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated:
April 30, 2021
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NAKED
BRAND GROUP LIMITED
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By:
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/s/
Justin Davis-Rice
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Name:
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Justin
Davis-Rice
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Title:
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Executive
Chairman and Chief Executive Officer
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