Banks give slack to struggling Bagir

(ShareCast News) - 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.