Israeli tailored clothing maker Bagir has agreed terms with Shandong Ruyi Technology for the leading Chinese textile group to take a 54% stake in the company.
The agreement follows news released by the two companies in November last year that Shandong Ruyi would invest US$16.5m for a majority 54% stake in Bagir.
The agreed terms see Shandong Ruyi invest into Bagir in return for 359.6m new ordinary shares representing a 53.7% stake.
Bagir has said the significant increase in capital will enable it to expand the suit trouser lines at its manufacturing base in Ethiopia, as well as establish jacket production lines in the country. In turn, this would boost its ability to win major apparel contracts from the world’s largest retailers.
Shandong says that as a result of its international textile and retail investments, it is well-positioned to provide Bagir with “significant” new commercial opportunities. The strategic partnership has the potential to have a “transformational effect” on the operations and the prospects of the Israeli company, Shandong added, while increasing its own profile and reputation.
Eran Itzhak, CEO of Bagir, said of the deal: “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.”
Shangdong Ruyi is one of China’s top 100 multinational enterprises, with listed subsidiaries in China, France and Japan. Headquartered in Jining, Shandong, it operates 13 domestic industrial parks and boasts a fully-integrated value chain spanning raw materials, textile processing, and apparel.
Bagir’s board of directors is unanimously recommending shareholders vote in favour of the resolutions to be proposed at the Extraordinary General Meeting, which will take place in London on 9 October.