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Bagir sues Shandong Ruyi claiming breach of contract; sees sales rise 9%

By BFN News | 01:28 PM | Friday 21 February, 2020


Tailoring group Bagir said it had taken legal action against China's Shandong Ruyi for breaching a contract related to an agreed investment in the company. Bagir also said it expected to post a positive underlying earnings performance for the year through December amid a 9% rise in sales. Shandong Ruyi agreed back in 2017 to pay $16.5m for 53.7% of Bagir but completion of the deal has undergone lengthy delays. Last year, Bagir agreed to further extend the deal's completion date to 31 March 2020, conditional on Shandong Ruyi providing suit jacket manufacturing equipment worth about $1.3m. The equipment would be for use in Bagir's Ethiopian manufacturing facility and was supposed to supplied by the end of September 2019. The equipment had still not been delivered, constituting a material breach of the terms of the contract, Bagir said on Friday. The company's revenue in calendar 2019 rose to $59.4m, up from $54.6m in 2018. Adjusted earnings before interest, tax, depreciation and amortisation were expected to turn positive, compared to a negative earnings of $1.0m. Bagir also said that it was finalising a plan to establish a new production line in Ethiopia to manufacture suit jackets, which would require an additional investment of about $0.5m. 'It is disappointing to announce our decision to have to take legal action against the Shandong Ruyi Group but we have been left with no alternative,' chief executive Micha Ronen said. 'This will, however, mean our operational focus can now be solely focused on Bagir and making innovative, modern, design-led tailored garments for the world's leading retailers.' At 1:28pm: (LON:BAGR) Bagir Group Ltd share price was -0.08p at 0.53p Story provided by StockMarketWire.com

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