Led by Credit Suisse, lenders to embattled Chinese coffee company Luckin have started court proceedings to liquidate the private company of founder Lu Zhengyao.
Credit Suisse's Singapore branch is seeking a court order to appoint liquidators for Haode Investment, which is controlled by Lu's family trust, «Bloomberg» reported on Friday, which citied a notice posted on Thursday in a government gazette for the British Virgin Islands.
A court hearing is set for June 8 on the island of Tortola, BVI, where the company is registered, the publication reported. The coffee chain – the biggest rival to Starbucks in China – lost some $5.5 billion, or 90 percent in market value after it admitted to sales fraud.
Haitong ($140 million), Credit Suisse ($100 million) and Morgan Stanley ($100 million) are among the lenders that reportedly extended margin loans totalling $518 million to Lu, backed by Luckin Coffee shares.
Nasdaq Delisting
On Tuesday, Nasdaq said it planned to delist the Xiamen-based company from the bourse, pending an appeal decision, which caused a round of panic selling.
In a post on Chinese social media platform Wechat, Lu said he never intended to defraud investors and only wanted to build good businesses with social value.
By Wednesday, shares in Luckin plunged to $2.82, it's lowest since it went public in 2019. Shares peaked at $51.38 in January.
