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New financings help LJI to expand ENZO retail chain
23 Oct '10
2 min read
LJ International Inc. reported that it has finalized US$26 million financings through a private stock placement and a credit facility with China's largest bank. Combined with internal cash flows, the new financings assure LJI sufficient capital to fund the planned expansion of its ENZO retail chain in China.
Pursuant to a commitment dated October 8, 2010, J. P. Morgan and Oasis agreed to purchase new shares of the Company and warrants to purchase shares of LJI's Enzo subsidiary at a $300 million valuation. As well, Industrial and Commercial Bank of China Ltd. (ICBC) has provided the Company with a credit facility of 90 million Renminbi, or US$13 million at approximately 5% interest rate.
The $26 million in total funding will be used to fill retail inventory and working capital needs to finance the opening of at least 60 new stores in 2011.
"The financing package we announce is a pivotal event in LJI's execution of its retail-based growth strategy," said LJI Chairman and CEO Yu Chuan Yih. "It provides us with sufficient capital, at very favorable terms, to meet our near-term goal of expanding the ENZO chain to approximately 200 stores. We are also highly gratified to get a vote of confidence from leading institutions in banking and fund management.
“The fact that we have gained such a substantial credit line from a respected lender like ICBC testifies to the high credibility of our ENZO business model. The same can be said about the equity participation of J. P. Morgan and Oasis. Additionally on the equity side, the warrants to buy the stake in ENZO represent a further vote of confidence, because they are conditional on ENZO reaching at least $300 million in market value."
Pursuant to a commitment dated October 8, 2010, J. P. Morgan and Oasis agreed to purchase new shares of the Company and warrants to purchase shares of LJI's Enzo subsidiary at a $300 million valuation. As well, Industrial and Commercial Bank of China Ltd. (ICBC) has provided the Company with a credit facility of 90 million Renminbi, or US$13 million at approximately 5% interest rate.
The $26 million in total funding will be used to fill retail inventory and working capital needs to finance the opening of at least 60 new stores in 2011.
"The financing package we announce is a pivotal event in LJI's execution of its retail-based growth strategy," said LJI Chairman and CEO Yu Chuan Yih. "It provides us with sufficient capital, at very favorable terms, to meet our near-term goal of expanding the ENZO chain to approximately 200 stores. We are also highly gratified to get a vote of confidence from leading institutions in banking and fund management.
“The fact that we have gained such a substantial credit line from a respected lender like ICBC testifies to the high credibility of our ENZO business model. The same can be said about the equity participation of J. P. Morgan and Oasis. Additionally on the equity side, the warrants to buy the stake in ENZO represent a further vote of confidence, because they are conditional on ENZO reaching at least $300 million in market value."
LJ International Inc
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