UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act 1934
Date of Report (Date of earliest event reported):
March 21, 2016
General
Steel Holdings, Inc.
(Exact name of registrant as specified in charter)
| Nevada | 001-33717 | 41-2079252 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
Level 2, Building
G,
No. 2A Chen
Jia Lin, Ba Li Zhuang,
Chaoyang
District, Beijing, China 100025
(Address of Principal Executive Offices)
| Registrant’s telephone number, including area code: | + 86 (10) 85723073 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01. | Entry into a Material Definitive Agreement. |
On March 21,2016, General Steel Holdings, Inc’s. (“General Steel” or the “Company”), wholly-owned subsidiary, Tongyong Shengyuan (Tianjin) Technology Development Co., Ltd. (“Tongyong Shengyuan”), entered into an Equity Transfer Agreement of Maoming Hengda Steel Co., Ltd. (the “Agreement”), to sell and transfer its 99% equity interest in Maoming Hengda Steel Co., Ltd. (“Maoming Hengda”) to Tianwu Tongyong (Tianjin) International Trade Co., Ltd. (“Tianwu JV”). Tongyong Shenguan owns 32% of the equity interests in Tianwu JV. Additional parties to the Agreement include, Mr. Zuyong Zhang, the General Manager and legal representative of Maoming Hengda, who owns 1% of the equity interests in Maoming Hengda, as well as Tianjin Qiugang Investment Co., Ltd. (“Tianjin Qiugang”), which was previously a majority-owned subsidiary of the Company.
In December 2015, Tianjin Qiugang transferred its 99% equity interest in Maoming Hengda to Tongyong Shengyuan; however, the registration of the share transfer has not yet been completed with the State Administration for Industry and Commerce (the “SAIC”). As a result, under the Agreement, Tianjin Qiugang has agreed with Tongyong Shengyuan to arrange a direct transfer of the 99% equity interest in Maoming Hengda from Tianjin Qiugang to Tianwu JV.
The aggregate purchase price for 100% of the equity interests in Maoming Hengda is RMB331,280,980.97 (approximately USD 50,966,304), of which RMB327,968,171.16 (approximately USD 50, 456,641) is payable to Tongyong Shengyuan and RMB3,312,809.91 (approximately USD509,663) is payable to Mr. Zhang. The payment of the purchase price will be made in two installments. The first installment in the aggregate amount of RMB264,890,990.57 (approximately USD40,752,460) shall be paid five days after the effective date of the Agreement (the “First Installment”) and the second installment in the aggregate amount of RMB66,389,990.40 (USD10,213,844) shall be paid within one year of the effective date of the Agreement.
The books and records, certificates, licenses and permits, as well as accounting records and other financial data and other documents, materials and agreements with respect to Maoming Hengda’s business and operations, will be delivered to Tianwu JV within three days after the payment of the First Installment. Tianwu JV shall not be responsible for any financial claims, debts or obligations of Maoming Hengda until the completion of the transfer of the equity interests in Maoming Hengda into the name of Tianwu JV.
The transfer of the equity interests in Maoming Hengda to Tianwu JV shall be completed upon the registration of such transfer with the SAIC (the “Equity Transfer”). The Agreement provides that after Tongyong Shengyuan and Mr. Zhang receive the First Installment they shall assist Tianwu JV to complete the Equity Transfer procedures with the SAIC.
| Item 8.01. | Other Events |
On March 24, 2016, the Registrant issued a press release announcing that its wholly-owned subsidiary, Tongyong Shengyuan (Tianjin) Technology Development Co., Ltd., entered into an agreement to sell its equity interests in Maoming Hengda Steel Co., Ltd. to Tianwu Tongyong (Tianjin) International Trade Co., Ltd. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| Exhibit No. | Description |
| 99.1 | Press Release, dated March 24, 2016 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| GENERAL STEEL HOLDINGS, INC. | |||
| By: | /s/ John Chen | ||
| Name: | John Chen | ||
| Title: | Chief Financial Officer | ||
Dated: March 24, 2016
Exhibit List
| Exhibit No. | Description |
| 99.1 | Press Release, dated March 24, 2016 |
Exhibit 99.1
General Steel Sells Maoming Hengda for $51 Million
BEIJING, March 24, 2016 /PRNewswire/ -- General Steel Holdings, Inc. ("General Steel" or the "Company") (NYSE: GSI), announced today that the Company, along with its 1% minority interest holder, have jointly signed an equity transfer agreement (the "Agreement") to sell 100% of the equity interest in Maoming Hengda Steel Co., Ltd., ("Maoming Hengda") to Tianwu Tongyong (Tianjin) International Trade Co., Ltd, ("Tianwu Tongyong") for RMB331.3 million or approximately $51 million.
The Company expects to receive total proceeds of RMB328.0 million (approximately $50 million), of which RMB262.3 million (approximately $40 million) will be paid within five days after the signing of the Agreement, and the remainder RMB65.7 million (approximately $10 million) will be paid within one year. The Company estimates that it will be able to realize a net equity gain of RMB452.7 million (approximately $70 million), which should substantially enhance its net book value.
Henry Yu, Chairman and interim Chief Executive Officer of General Steel commented, "Today's announcement is another critical step in the Company's business transformation, which also included the recently-completed sale of the Company's steel manufacturing business. This transaction allowed us to unlock the value in Maoming Hengda's land assets, which we believe should greatly enhance our capital structure and solvency, enabling us to strengthen our existing business while exploring additional business opportunities."
About General Steel
General Steel Holdings, Inc. is headquartered in Beijing, China, and trades iron ore and steel products. To be added to the General Steel email list to receive Company news, or to request a hard copy of the Company's Annual Report on Form 10-K, please send your request to investor.relations@gshi-steel.com.
About Tianwu Tongyong
Tianwu Tongyong (Tianjin) International Trade Co., Ltd is a joint venture, which is 40% owned by Tianjin Material and Equipment Group Corporation, a global 500 Enterprises, 32% owned by General Steel's subsidiary, Tongyong Shengyuan (Tianjin) Technology Development Co., Ltd., and 28% owned by an unrelated third party.
Forward-Looking Statements
This press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs about future events and financial, political and social trends and assumptions it has made based on information currently available to it. The Company cannot assure that any expectations, forecasts or assumptions made by management in preparing these forward-looking statements will prove accurate, or that any projections will be realized. Actual results could differ materially from those projected in the forward-looking statements as a result of inaccurate assumptions or a number of risks and uncertainties. These risks and uncertainties are set forth in the Company's filings under the Securities Act of 1933 and the Securities Exchange Act of 1934 under "Risk Factors" and elsewhere, including those disclosed in the Company's most recent Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission. Forward-looking statements contained herein speak only as of the date of this release. The Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether to reflect new information, future events or otherwise.
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