Apparel sales and marketing organisation Innovo Group Inc has completed the first phase of its purchase of Azteca Production International Inc's knit apparel division.

Through its newly formed subsidiary Innovo Apparel Inc, the company has purchased the knit division's customer lists, the right to manufacture and market all of the knit division's current products, non-compete and non-solicitation agreements and other assets. It has also issued to Azteca, 700,000 shares of company common stock and promissory notes worth $3.6m.

Azteca's Knit Division designs, produces and markets knit apparel products for private label and retail customers such as Tommy Hilfiger, Calvin Klein, Express, Bongo, American Eagle and Sears.

The second phase of the transaction calls for the cash purchase of the inventory of the knit division as it stands on October 31, 2001.

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