Eternite earns HK$100mn via placing and subscription pacts

62mn shares and subscription of 73mn shares by founder of Larry Jewelry strengthened the company’s capital base to accelerate development of retail jewelry business.

Eternite International Company Limited (“Eternite”) has signed a Placing Agreement and a Subscription Agreement to raise HK$100,525,000 for accelerating the development of its retail jewelry business.

According to the Placing Agreement entered with its substantial shareholder Fullink Management Limited (“Fullink”), 61,800,000 shares will be placed to not less than six professional institutional investors, including Gen2 Partners Limited (“Gen2 Partners”), as well as other investors, representing approximately 8.88% of the Company’s existing issued share capital and approximately 7.44% of the enlarged issued share capital. South China Securities Limited is the placing agent. 

In addition, the Company also entered into a Subscription Agreement with several connected parties of the Company including Mr. Larry Chan, the founder of Larry Jewelry; Mr. Joe Chan,

Chairman of Eternite and the Company’s other existing major shareholders who will together subscribe 72,700,000 Placing Shares, representing approximately 10.45% of the Company’s existing issued share capital and approximately 8.75% of the enlarged issued share capital.

Both the placing price and subscription price are at HK$0.75, represents a discount of 13.8% to the closing price of HK$0.87 per Eternite’s share on 17 August 2011, being the last trading day prior to signing of the Agreement. The net proceeds from the Top-up Subscription and the Subscription is expected to amount to approximately HK$100,525,000 in aggregate and will be used as general working capital for future business development of the Group.

Mr Barry Lau, Managing Partner & Chief Investment Officer of Gen2 Partners, said, "We are very enthusiastic about this investment opportunity as we believe in the massive market potential of luxury goods for the growing middle class in China. Besides, we have confidence in Joe Chan's leadership and the ability of the team which he has assembled to execute the deal. Furthermore, we believe the ability to co-invest with Mr Larry Chan is itself a unique proposition."

Mr Joe Chan, Chairman of Eternite, said, “We are greatly excited to gain the enormous support from Mr Larry Chan as well as having more institutional investors, including Gen2 Partners, joining as our shareholders. Their investment demonstrates their optimism towards the prospects of the Group as well as the jewelry industry in Asia. Their capital support immediately boosts our cash position, enabling us to have greater flexibility for future business expansion. With strengthened financial resources and the support of our strategic shareholders, we are leveraging the acquisition of Larry Jewelry to expand more quickly into the jewelry market in China.”