Kingold Jewelry Announces Credit Line Increase of up to RMB400 Million
(Approximately US$65.4 Million) Under Gold Leasing Agreement With China
WUHAN,China, Oct. 24, 2013
WUHAN,China, Oct. 24, 2013 /PRNewswire/ -- Kingold Jewelry, Inc. (NASDAQ:
KGJI), ("Kingold" or the "Company"), one of China's leading manufacturers and
designers of high quality 24-karat gold jewelry, ornaments and
investment-oriented products, today announced that the Company has received
an increase in the credit line established under the Gold Leasing Agreement
("Agreement") with China Construction Bank's ("CCB") Wuhan Jiang'An branch,
which was signed in January 2013. CCB proposed the increase of the credit line
based on Kingold's strong performance and appropriate handling of gold.
Kingold's total credit line under the Agreement is now RMB400 million
(approximately US$65.4 million), an increase of RMB150 million from the
original credit line of RMB250 million.
The Agreement is similar to a revolving credit line, with CCB providing
Kingold a reusable credit line of up to RMB400 million; however, drawdowns
under the facility (and repayment thereunder) will be made in gold rather than
currency. Gold loans under the facility will bear interest at a rate of
approximately 6% p.a., with interest based on the actual weight of gold loaned
under the facility (in grams), the price of gold (yuan/gram), in addition to
the rate and number of days the gold was loaned under the facility. The
increased line of credit is available until July 22, 2014.Because the market
price of gold may fluctuate during the term of the Agreement, Kingold and CCB
have agreed to a cap of 95% on the credit line based on the actual value of
gold loans outstanding at any time under the credit facility.
China Construction Bank is a leading commercial bank in China providing a
comprehensive range of commercial banking products and services. At the end of
June 2013, the market capitalization of the Bank reached US$176.7 billion,
ranking fifth among listed banks in the world. The Bank had a network of
14,925 branches and sub-branches in Mainland China, maintained 10 overseas
branches in Hong Kong, Singapore, Frankfurt, Johannesburg, Tokyo, Seoul, New
York, Ho Chi Minh City, Sydney and Taipei, and owned multiple subsidiaries,
such as CCB Principal Asset Management, CCB Financial Leasing, CCB Trust, CCB
Life, Sino-German Bausparkasse, CCB Asia, CCB London, CCB Russia, CCB Dubai
and CCB International.
Mr. Zhihong Jia, Chairman and CEO of Kingold Jewelry, Inc. stated, "We are
very pleased with our partnership with CCB under this Agreement. This
increased credit line will allow us to further increase our production
capacity and grow our business over the next several months. We continue
working hard to take advantage of the market opportunities in China's 24K gold
consumer goods market and are honored to have the support of CCB."
About Kingold Jewelry, Inc.
Kingold Jewelry, Inc. (NASDAQ: KGJI), centrally located in Wuhan City, China's
fourth largest city, was founded in 2002 and today is one of China's leading
designers and manufacturers of 24-karat gold jewelry, ornaments and
investment-oriented products. The Company sells both directly to retailers as
well as through major distributors across China. Kingold has received numerous
industry awards and has been a member of the Shanghai Gold Exchange since
2003. For more information, please visit www.kingoldjewelry.com.
Business Risks and Forward-Looking Statements
This press release contains forward-looking statements that are subject to the
safe harbors created under the Securities Act of 1933 and the Securities
Exchange Act of 1934. These include statements regarding Kingold's ability to
further increase production capacity and grow its business over the next
several months. Readers are cautioned that actual results could differ
materially from those expressed in any forward-looking statements. In
addition, please refer to the risk factors contained in Kingold's SEC filings
available at www.sec.gov, including Kingold's most recent Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q. Readers are cautioned not to
place undue reliance on any forward-looking statements, which speak only as of
the date on which they are made. Kingold undertakes no obligation to update or
revise any forward-looking statements for any reason.
Kingold Jewelry, Inc.
Bin Liu, CFO
Phone: +1-847-660-3498 (US) / +86-27-6569-4977 (China)
The Equity Group Inc.
Adam Prior, Senior Vice President
Katherine Yao, Associate
SOURCE Kingold Jewelry, Inc.
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