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RAPAPORT... Eastern Gold Jade Co. Ltd. anticipates raising $1.3 billion (CNY 8 billion) in a private placement with no more than 10 undisclosed investors by issuing up to 310 million shares. According to the company's filing on the Shanghai Stock Exchange, it intends to develop financial service projects for the jewelry industry, create a jewelry financial platform for small and medium jewelry merchants, consumers and investors and provide identification, assessment, pawn service, small loans and peer-to-peer (P2P) online lending and other ancillary financial services.
The company expects to use approximately $152 million from the placement proceeds toward creating an integrated Internet and jewelry service platform, about $354 million to create a small loan firm in Shenzhen and $418 million to fund the Shenzhen City Digntai Pawn, while $80 million will provide capital for an asset management firm in Yunnan and $284 million will be used to repay loans.
The company's shares closed 10 percent higher on Monday to CNY 36.30 on the Shanghai Stock Exchange. During the most recent fiscal year, which ended on December 31, 2014, Eastern Gold Jade's revenue fell 23.4 percent year on year to nearly $732 million (CNY 4.55 billion) and profit declined 37.2 percent to $16 million (CNY 98.7 million). This past week, Eastern Gold Jade invested approximately $39.5 million in its wholly owned subsidiary, a Yunnan-based jewelry company, to secure a 51 percent stake in a joint-venture equity investment business in Kunming.
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