Bagir Group Ltd Update on strategic partnership (8240P)
February 13 2019 - 2:00AM
UK Regulatory
TIDMBAGR
RNS Number : 8240P
Bagir Group Ltd
13 February 2019
13 February 2019
Bagir Group Limited
("Bagir" or the "Company")
Strategic partner Shandong Ruyi to provide
manufacturing equipment and improved credit terms
Bagir (AIM: BAGR), a designer, creator and provider of
innovative tailoring, is pleased to announce, that Shandong Ruyi
Technology Group ("Shandong Ruyi"), a strategic partner, further to
the previously announced $16.5 million proposed investment in
Bagir, will provide the Company suit jacket manufacturing equipment
for exclusive and indefinite use in its Ethiopian manufacturing
facility. The manufacturing equipment, which consists of nearly new
and second-hand machinery, is being provided to Bagir for nil
consideration. The manufacturing equipment provided has an
estimated market value of approximately $1.3 million. The
manufacturing equipment is expected to be delivered to the
Company's Ethiopian manufacturing site during 2019.
The Company's Ethiopian facility has existing capacity to
produce up to 3,500 suit trousers per day. The addition of the new
manufacturing equipment will form the base of a new production line
to manufacture suit jackets which, together with an additional
investment of approximately $1.5 million from the Company, will be
capable of producing 500 suit jackets per day. The additional
investment is expected to take place after the completion of the
investment by Shandong Ruyi and the Company expects that the suit
jacket line will be fully operative by the end of H1 2020. This
will be the first stage of the Company's medium term investment
plans to increase the capacity of the Ethiopian facility to
approximately 3,000 full suits per day using the remaining
investment proceeds of $13.2 million from Shandong Ruyi, which are
expected to be received no later than 30 May 2019 (following the
$3.3 million non-refundable deposit already received by the
Company).
In addition, Shandong Ruyi, an existing supplier of Bagir, has
granted an extension of 90 days to their usual credit payment terms
on the acquisition of up to 500,000 meters of wool and wool blend
fabrics at market value. This extension to Shandong Ruyi's credit
terms will last until 30 June 2019.
Shandong Ruyi is a related party of the Company for the purposes
of the AIM Rules by virtue of the investment agreement signed
between Shandong Ruyi and Bagir on 31 August 2018. The Directors
consider, having consulted with the Company's nominated adviser,
N+1 Singer, that the terms of transactions detailed above are fair
and reasonable insofar as the Company's shareholders are
concerned.
Chief Executive Officer, Eran Itzhak, said: "We are delighted to
commence our close strategic partnership with Shandong Ruyi. The
machinery provided will accelerate both Bagir and Shandong Ruyi's
commitment to take advantage of the manufacturing opportunity in
Ethiopia. This, together with the new favourable payment terms for
fabric, also shows the obvious advantages to Bagir of partnering
with one of the world's leading textile manufactures."
For further information please contact:
Bagir Group Limited via Novella on:
Eran Itzhak, Chief Executive Officer +44 (0) 20 3151
Dotan Levy, Chief Financial Officer 7008
Tessa Laws, Non-Executive Chairman
N+1 Singer (Nominated Adviser & Broker)
Mark Taylor +44 (0)20 7496
James Moat 3000
Novella Communications (Financial PR)
Tim Robertson +44 (0)20 3151
Toby Andrews 7008
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END
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