LJ International and ENZO Jewelry Enter Into Agreement to Raise $41M for Preferred Shares of Enzo

LJ International Inc. JADE today announced that it has entered into a definitive agreement for a private placement of shares of Enzo Jewelry, Inc., its indirect wholly-owned subsidiary, with a consortium of investors led by the private equity firms FountainVest Partners and Spring Capital Asia. Under the terms of the agreement, the Investors have agreed to make an initial investment of US$41.38 million, including an investment of US$31.40 million in newly issued ENZO shares and an acquisition of existing shares of ENZO from LJI in the amount of US$9.98 million. In aggregate, the Investors will hold approximately 28.27% of ENZO's total issued share capital after giving effect to the transaction, which will be in the form of a newly created class of redeemable convertible preferred shares. LJI intends to apply the net proceeds from the investment towards capital expenditures for new store openings, marketing expenses and general working capital. As part of the transaction, the Investors will also receive certain rights to make a further investment of approximately US$25.88 million to acquire up to 10.35% of ENZO. LJI has also agreed to appoint Investor representatives to ENZO's board of directors.