UNITED STATES
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FORM
CURRENT REPORT
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Item 8.01 Other Events.
As previously disclosed, Renren Inc. (“Renren” or the “Company”) issued standby letters of credit (“Letters of Credit”) to the benefit of East West Bank (the “Bank”) that guaranteed the payment of certain loans by Kaixin Auto Holdings (“Kaixin”) and its subsidiary, Anhui Xin Jieying Auto Retail Co., Ltd. ( “Jieying”), each of whom were previously a subsidiary of the Company. If Kaixin and/or Jieying defaulted on the guaranteed loans, the Bank may seize the Company’s cash deposits pledged as security under the Letters of Credit and/or demand reimbursement from the Company. The cash deposits pledged amounted to US$9.1 million as of June 1, 2023. Because the Company believed the guarantee would not be released in the foreseeable future, it had recorded a provision for the full value of the guarantee in its audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
As of June 1, 2023, the Bank had claimed approximately US$5.8 million under the Letters of Credit in connection with Jieying’s default of certain guaranteed loan denominated in Chinese Renminbi. No payment has been made to the Bank in connection with such claim, but the Company expects to reimburse the Bank for the full amount of the claim. Additionally, on June 1, 2023, East West Bank assigned to the Company all of the Bank’s rights, title, and interest in and to that certain US$2,000,000 loan made by the Bank to Kaixin (the “Kaixin USD Loan”) for a total consideration of approximately US$2.0 million. The Kaixin USD Loan was also guaranteed by the Letters of Credit. The Company is evaluating its options to pursue recovery from Kaixin after the assignment, but there can be no assurance that the Company will be able to achieve any recovery.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RENREN INC. | |||
By: | /s/ Chris Palmer | ||
Date: | June 6, 2023 | Chris Palmer | |
Chief Financial Officer |
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