KINGOLD JEWELRY, INC. (NASDAQ:KGJI) Files An 8-K Entry into a Material Definitive Agreement

KINGOLD JEWELRY, INC. (NASDAQ:KGJI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

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On December 1, 2017, Wuhan Kingold Jewelry Company Limited (“Wuhan Kingold”), the controlled subsidiary of Kingold Jewelry, Inc. (the “Company”), entered into a Trust Loan Agreement in the amount of RMB 1 billion (equivalent to approximately US$ 151 million) with Zheshang Jinhui Trust Co., Ltd. (“Jinhui”). The trust loan (the “Trust Loan”) was approved by the Company’s board on December 1, 2017. The stated purpose of the Trust Loan is purchasing standard gold raw material with the fineness of 999.9. The Trust Loan may be issued by tranches. The amount of each tranche is limited by the raising amount of the corresponding trust plan. Each tranche of the Trust Loan has a 24-month term, starting from the issuance date of each tranche. In the first year, the general annual interest rate is 7.7%, and the fixed annual interest rate is 1.5%. In the second year, the general annual interest rate is 8.6% and the fixed annual interest rate is 0.6%.

Wuhan Kingold’s obligations, responsibilities, representations and warranties, and commitments under the Agreement are secured by (1) Mr. Zhihong Jia, our CEO and Chairman, to a guarantee agreement signed by Mr. Zhihong Jia and Jinhui; and (2) Wuhan Kingold’s pledged 2,540 kg Au99.99 gold, to a pledge agreement signed by Wuhan Kingold and Jinhui. The repayment of the Trust Loan may be accelerated under certain conditions, including upon a default of principal or interest payment when due, breach of representations or warranties, certain cross-defaults, upon the occurrence of certain material events affecting the financial viability of Wuhan Kingold, and other customary conditions.

An English translation of the Trust Loan Agreement is filed as Exhibit 10.1 hereto. The foregoing summary of the Trust Loan Agreement does not purport to be complete and is qualified in its entirety by reference to such agreement, which is incorporated by reference herein.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in its entirety into this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

EX-10.1 2 tv481467_ex10-1.htm EXHIBIT 10.1   Exhibit 10.1   Contract No.: ZJX(D)Z No. 2017JHXT0231   Trust Loan Agreement (By Tranches)   Zheshang Jinhui Trust Co.,…
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Kingold Jewelry, Inc. designs and manufactures 24-karat gold jewelry and Chinese ornaments, through a variable interest entity relationship with Wuhan Kingold Jewelry Company Limited (Wuhan Kingold). The Company develops, promotes and sells a range of products to the jewelry market across the People’s Republic of China (PRC). The Company offers a range of in-house designed products, including, but not limited to, gold necklaces, rings, earrings, bracelets and pendants. The Company also sells gold bars and coins and other products through agreements with various banks in China. The Company sells its products directly to distributors, retailers and other wholesalers, who then sell its products to consumers through retail counters located in both department stores and other traditional stand-alone jewelry stores. The Company’s subsidiary, Wuhan Kingold Internet Co., Ltd., is engaged in online sales of jewelry products.

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