Bagir has completed its purchase of a 50% stake in Nazareth Garments Share Co, which owns and operates a garment factory in Ethiopia, for a total consideration of US$1.5m.
Bagir says US$1.2m of the total consideration will be used for machinery and general facility improvements to help ensure that the output is suitable for export, with the balance paid to the shareholders of Nazareth.
The factory in Ethiopia manufactures trousers and formal shirts predominantly for the Ethiopian market. Nazareth currently employs approximately 400 staff and owns a 9,000sq m factory building and the 50,000m2 plot on which the factory is located.
As at 7 July 2013, being the end of Nazareth’s fiscal year, Nazareth had revenue of approximately US$0.9m, profit before tax of approximately US$0.2m and net assets of approximately US$0.3m. The factory is now expected to undergo certain upgrades to its facilities to enable the production of high quality trousers and jackets for export into the global market.
This is currently forecast to commence during the first half of 2015.
Bagir Group chief executive Danny Taragan said: “We are pleased to have completed the acquisition of a 50% stake in Nazareth Garments Share Company in Ethiopia. The Nazareth factory manufactures trousers and formal shirts and, once certain operational upgrades have been completed, will enable us to utilise competitive advantages to produce high quality garments for global export. The duty free export environment to the UK and US, combined with governmental support for the textile industry, means that once the site upgrades are completed, we will be well placed to deliver quality garments at a competitive price for our customers.”
At 9:39am: (LON:BAGR) Bagir Group Ltd. Ord Ils0.04 share price was 0p at 11.5p
Story provided by StockMarketWire.com