Bagir Group Ltd Strategic investor and restoration of trading (2884X)
November 23 2017 - 1:00AM
UK Regulatory
TIDMBAGR
RNS Number : 2884X
Bagir Group Ltd
23 November 2017
23 November 2017
This announcement contains inside information
Bagir Group Ltd.
("Bagir" or the "Company")
Strategic Partnership with Global Textile Manufacturer
alongside a $16.5 million investment
and
restoration of trading
Bagir (AIM: BAGR), a designer, creator and provider of
innovative tailoring, is pleased to announce a proposed strategic
partnership with Shangdong Ruyi Technology Group Ltd ("Shandong
Ruyi Group"), a leading Asian global textile manufacturer,
alongside a proposed investment of $16.5 million to acquire
c.54%(1) of the Company's enlarged issued share capital.
Founded in 1972, Shandong Ruyi Group is one of the largest
textile manufacturers in China and ranks among the Top 100 Chinese
multi-national enterprises. The group predominately engages in
textile offerings and owns a fully-integrated value chain with
operations spanning across raw materials cultivation, textiles
processing, and design and sale of brands & apparel.
Headquartered in Jining, Shandong, the hometown of Confucius and
Mencius, Shandong Ruyi Group operates 13 domestic industrial parks
and boasts some of the largest production lines and advanced
technologies in China. Shandong Ruyi Group also has significant
distribution with more than 4,000 points of sales (POS) network
that services a global customer base spread across 6 different
continents. Shandong Ruyi Group has over 20 subsidiaries, with
three listed subsidiaries in China, France and Japan.
The Directors of Bagir believe that through forming this
strategic partnership with Shandong Ruyi Group together with the
significant increase in capital, the transaction has the potential
to transform the Company and its ability to compete and win major
apparel manufacturing contracts from the world's largest
retailers.
(1) Approx. 51% fully diluted
Transaction rationale
-- Shandong Ruyi Group has substantial retail/textile
investments globally and is therefore well positioned to provide
Bagir with significant new commercial opportunities.
-- The new capital will:
o be used partly to expand significantly the suit trouser and
establish the jacket production lines in the Company's duty free
and cost-competitive Ethiopian manufacturing base
o enhance R&D and innovation activities
o provide the working capital to support the growth
-- Shandong Ruyi Group will be a majority shareholder in the
Company and one or more Director(s) will be nominated by Shandong
Ruyi Group to join the Board of Bagir, subject to the completion of
the necessary regulatory due diligence.
-- The purchase of new shares is being proposed at a substantial
premium to the most recently traded price and is at approximately
the same price as the last fundraising carried out by Bagir in
December 2016.
-- An initial payment of $1.65m to be paid within 3 business
days which is non-refundable in the event that Shandong Ruyi Group
fails to secure Chinese regulatory consent but is refundable if
Bagir's shareholders do not approve the transaction. The balance of
the funds are to be paid post-shareholder approval.
-- Shandong Ruyi Group and Bagir will evaluate ways in which
Shandong Ruyi Group can provide additional future operational
support to Bagir.
Share issue
Under the proposed agreement Shandong Ruyi Group will subscribe
for 359,560,310 new Ordinary Shares at approximately 3.5p per share
as at today's exchange rate. The issue price is approximately the
same price as Bagir's last fundraising round, carried out in
December 2016 and represents a 155% premium to the price of 1.375p
per Ordinary Share at the point trading in the shares was suspended
on Monday 20 November 2017 at 12:10. The acquisition of these
shares will result in Shandong Ruyi Group owning c.54% of the
enlarged share capital of Bagir. This would be diluted down to 51%
in the event that all of the current share options and warrants are
exercised.
The transaction is subject to the approval of Bagir's
shareholders and accordingly, a circular is expected to be posted
to shareholders in the coming weeks (the "Circular"). The Circular
will provide full details of the proposed transaction and a notice
convening a General Meeting. Bagir's articles include certain
provisions which apply in the event that an investor seeks to
acquire more than 30% of the voting shares in Bagir and further
details on the applicability of these will be set out in the
Circular.
Eran Itzhak, Chief Executive Officer of Bagir said:
"It has been our view for some time that Ethiopia is proving to
be potentially transformational. The Shandong Ruyi Group team
recognises the strength and experience that we have across our
business and it is our advanced position in Ethiopia which they
have identified as providing them with a global strategic
advantage. With Shandong Ruyi Group as a key shareholder and
partner we believe that Bagir will be best placed to exploit the
opportunity presented by our Ethiopian manufacturing base far
quicker and with more certainty than we could independently."
Restoration of trading
Given that the proposed investment does not amount to a reverse
takeover within the meaning of AIM Rule 14, restoration of trading
in the Company's shares is expected to take place at 7:30 am
today.
For further information, please contact:
Bagir Group Ltd. via Novella Communications on:
Eran Itzhak, Chief Executive Officer +44 (0) 20 3151 7008
Udi Cohen, Chief Financial Officer
Tessa Laws, Non-Executive Chairman
N+1 Singer
Alex Price +44 (0) 20 7496 3000
Novella
Tim Robertson
Toby Andrews +44 (0) 20 3151 7008
This information is provided by RNS
The company news service from the London Stock Exchange
END
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