Kingold Jewelry Announces Agreement to Acquire Industrial Land Rights in
Wuhan, China for Development of Wuhan Kingold Jewelry Industrial Park
Company to Create Major Hub for Jewelry Industry in Central China
WUHAN CITY, China, Oct. 29, 2013
WUHAN CITY, China, Oct. 29, 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
entered into an acquisition agreement to acquire the operating rights for
66,666 square meters (717,587 square feet) of industrial land for use in the
development of Wuhan Kingold Jewelry International Industry Park in the
Jiangan district, Wuhan (the "Project"), for approximately 1.0 billion RMB
(approximately USD$164 million at current exchange rates) from Wuhan Huayuan
Science and Technology Development Limited Company.
The Company expects construction of Wuhan Kingold Jewelry International
Industry Park to be completed by mid 2015.This Project is located at No. 12
Han Huang Road, Jiang'An District, Wuhan, a premier district on the north
shore of the Yangtze River.
The construction of Wuhan Kingold Jewelry International Industry Park is
anticipated to be an integral part of the Company's long-term growth strategy
by creating a major hub for the jewelry industry in the central region of
China. Wuhan Kingold Jewelry International Industry Park is expected to be a
major commercial complex that provides a place where businesses and activities
in the jewelry industry come together, including manufacturing, wholesale, and
retail shopping.The Company plans to move part of its production facility to
this industrial park, which will provideKingold greater flexibility to expand
production levels. Key elements of the Project include of the following:
oAcquisition of project: the Company acquires the total project (including
both land lease and floor space) at a cost of roughly RMB 5,204 per square
meters ($483.5 per square foot).
oThe Company plans to construct seven buildings with total useable floor
space of approximately 192,000 square meters (2.07 million square feet),
36,000 square meters (389,000 square feet) of which is anticipated to be
used as the Company's product show center, product research and
development center, and corporate headquarters.
oOf the remaining area, 42,000 square meters (452,000 square feet) is
expected to operate as retail shops, and 114,000 square meters (1.23
million square feet) is expected to be leased as office space to domestic
and international jewelry companies and related industry organizations.
Kingold intends to finance the Project predominantly with bank loans
supplemented by operating cash flows, and where possible, deposits or advances
the Company may receive from lessees.
Payments for the project will be made in tranches as follows:
Date Payment Commitment
(RMB in millions)
October 2013* 200
January 2014 50
June 2014 100
September 2014 150
January 2015 250
June 2015 250
Total 1000 $164 million**
* Includes initial deposit made to seller of 5 million RMB to maintain access
or option to
complete this transaction.
** In USD based on current exchange rates
Mr. Zhihong Jia, Chairman and CEO of Kingold Jewelry, Inc., stated, "We are
very pleased to announce this landmark event in Kingold's history, which we
believe will help position our Company to be a vertically-integrated, leading
manufacturer of gold jewelry and provider of wholesale (and retail) jewelry in
Central China.We expect to utilize the land to create a new headquarter for
the Company and develop a 'Jewelry City.'This Project will encompass all
aspects of the gold manufacturing and distribution process, from development
to retail sales.We believe Wuhan Kingold Jewelry International Industry Park
will not only be a sought-after display area for well-known jewelry brands for
both retail and wholesale distributors, but will also serve as an information
exchange for a variety of participants in the jewelry industry. We expect it
will also be a platform by which Kingold can build relationships with global
jewelry companies.We believe this is the first step to creating a truly
international enterprise and look forward to updating investors on this
project's progress in the coming weeks and months."
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. Forward looking statements can be identified by the
words "will," "expect," "anticipate," "estimate," "plan" or other similar
expressions. Forward-looking statements in this release include, among
others, statements regarding Kingold's long-term growth strategy, expectations
regarding the role of Wuhan Jewelry Industrial Park as a major commercial
complex, increased production abilities, and the financing of the Project.
Such forward looking statements are subject to a number of risks and
uncertainties, such as whether or not Kingold will meet the closing conditions
for the acquisition, whether or not it can finance the acquisition, whether or
not it will be successful in the construction, leasing and operation of the
planned project, whether or not it will be able to attract tenants and others
to make the Project a success, and whether or not the demand for jewelry in
this market will continue to grow, as well as 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.
Actual results could differ materially from those expressed in any
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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