Banks give slack to struggling Bagir

Bagir Group started 2016 with renegotiated terms on its banking situation, including extensions to its current loan repayment schedule.

Its two banks - Leumi Bank and Discount Bank - also agreed to waive covenant tests at both 31 December 2015 and 30 June 2016.

The AIM-listed tailoring company said its current $11.2m (£7.58m) long-term loan had $2.7m in repayments due this year and $8.5m next year.

This was revised to $465,000 this year, $750,000 next year, $1m in 2018, $1.7m in 2019, and $7.3m by the end of 2020.

Bagir also announced its current short-term revolving $10m loan with final repayment due on 31 December 2017 was being reclassified as a long-term loan, with the next revolving date deferred to 1 January 2018.

"The waiver of the testing of the covenants is of immediate importance but of equal, if not more, significance is that we have secured agreement (with the banks) to a three year extension ot the repayment terms of the loans and the reclassification of the previous short-term revolving 12 month loan to a long-term facility", said Bagir CEO Eran Itzhak.

"This provides us with increased financial security as we seek to rebuild the company", he added.

Bagir made an adjusted loss of $1.7m in the six months to 30 June 2015. At the time, it said competitive pressures and the deferral of planned sales were likely to result in a significantly poorer second half.