Bagir recommends shareholders approve Shandong Ruyi investment

3rd Sep 2018 12:27

(Sharecast News) - Tailoring company Bagir Group said on Monday that, further to its announcement on 23 November last year, it had agreed terms with Shandong Ruyi Technology Group for a proposed investment and strategic partnership, under which Shandong Ruyi will invest $16.5m into the company in return for 359,560,310 new ordinary shares, representing 53.7% of its enlarged share capital.The AIM-traded firm's board said it considered the proposals and the passing of the required resolutions to be in the best interests of the company, its shareholders and its depositary interest holders for a number of reasons.It said that the use of the investment by Shandong Ruyi, to directly target expediting the development and expansion of the manufacturing facility in Ethiopia, would "significantly" accelerate the timetable for the operational potential in Ethiopia to be realised, enabling the facility to attract and compete for major apparel manufacturing contracts from large international retailers which generate an acceptable level of return to Bagir.Shandong Ruyi, as a result of its "significant" international textile and retail investments, was said to be "well-positioned" to provide the group with significant new commercial opportunities.The strategic partnership had the potential to have a "transformational" effect on the operations and the prospects of the group, the board added, from which all shareholders and depositary interest holders would benefit.Bagir also said the strategic partnership with Shandong Ruyi would increase the company's own profile and reputation.Accordingly, the directors unanimously recommended that shareholders voted in favour of the resolutions to be proposed at the extraordinary general meeting as the directors, who had an interest in ordinary shares, had irrevocably undertaken to do in respect of their own and connected persons beneficial shareholding."We are delighted to be putting this proposal to our shareholders as we believe it to be transformative, creating a platform from which Bagir has the potential to become a significant player in our market of apparel manufacturing," said Bagir chief executive officer Eran Itzhak.