Luckin Coffee chairman defaults on loan, surrenders company shares
Charles Zhengyao Lu, non-executive chairman of Luckin Coffee, speaks during the company's IPO at the Nasdaq Market site in New YorkHONG KONG/NEW YORK (Reuters) – Luckin Coffee Chairman Charles Zhengyao Lu and Chief Executive Jenny Zhiya Qian have handed over shares in the embattled Chinese coffee chain to lenders after a company controlled by Lu’s family defaulted on a $518 million margin loan, one of the banks said on Monday.
Lu Zhengyao did not immediately respond to a request for comment.
If all the shares pledged under the $518 million loan are sold, Lu Zhengyao’s voting interest in Luckin Coffee would not decrease, while Qian’s beneficial and voting interests would decrease significantly, Goldman Sachs said, without quantifying the size of the reduction.
The class B shares will be converted into American Depositary Shares (ADSs).
Luckin shares were down a further 15.4% in early afternoon trading in New York on Monday.
April 06, 2020 15:33 UTC