Scandal-plagued Luckin Coffee’s two founders, Lu Zhengyao and Qian Zhiya, have handed over shares in the Chinese chain to a group of lenders after a company controlled by Lu’s family defaulted on a $518 million loan, reported Caixin.
The news comes just days after Luckin confessed to fabricating sales worth RMB 2.2 billion ($310 million) for much of 2019, causing the company’s shares to drop nearly 80% in US trading.
Some 515 million class B shares and 95.4 million class A shares of Luckin had been pledged to secure the $518 million loan, including shares additionally pledged by the family trust of Qian, Reuters reported Monday, citing a notice by Goldman Sachs Group to its clients. Goldman Sachs is one of the banks involved in the original loan.
The other lenders, which reportedly include Morgan Stanley, Credit Suisse and Barclays, have “commenced the process of enforcement against the collateral,” with plans to sell 76.4 million of the shares pledged, the South China Morning Post quoted Goldman Sachs as saying, which is acting as a disposal agent.