Bagir to run out of cash, is now assessing options
The problems are continuing for under-pressure men's tailoring specialist Bagir Group. Not only has the company had to face its acquisition by Shandong Ruyi falling apart, on Friday it said that the coronavirus pandemic has undermined its ability to continue as a going concern.
The company "has continued to experience existing orders being placed on hold or cancelled by customers, with a significant proportion of the previous order book now on hold or cancelled,” we’re told.
This limited visibility on future revenues and payments by customers, particularly in its key markets in the UK and US, has combined with its current cash balance to lead the board to conclude that it currently has “insufficient cash resources available to operate the business as a going concern”.
As such, it's “actively assessing its options”, which include “seeking immediate additional funding to support working capital needs. In addition, the board is taking legal advice, including insolvency advice, as to its options”.
It has also requested an immediate suspension of trading in the company's shares on the London Stock Exchange due to the uncertainty of the group's financial position. Those shares were down from a high of 6.75p each in July 2016 to 0.48p at close of trading on Thursday. That last figure valued the entire firm at just £1.41 million.
In February, the company had said after waiting several years for an investment by Shandong Ruyi to complete and with no sign of that on the horizon, it was taking legal action for breach of contract.
At the time it also said a trial order for a large UK retail client would be completed and delivered during March with a $0.85 million suit order for this year having been secured from that customer. And there were “good prospects for winning further orders from new customers during the current year”. Those prospects will now have disappeared.
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