Fashion group Shandong Ruyi's creditors seek control of Lycra

China Everbright

22/02/2022 11:38

By Selena  Li
    HONG KONG, Feb 22 (Reuters) - Creditors of debt-laden
fashion conglomerate Shandong Ruyi Technology Group will seek
control of Lycra after Ruyi defaulted on a $400 million loan it
took from them to buy the fibre maker. 
    A statement from the creditors on Monday said that Ruyi,
known for its ambition to become the LVMH  LVMH.PA  of China,
has been able to repay the Lycra loan since May 2019. 
    The lenders include Hong Kong-based China Everbright Limited
 0165.HK  and Tor Investment Management, along with Seoul-based
private equity firm Lindeman Partners and its affiliate Lindeman
Asia. 
   Their steps to assume full equity control of Lycra include 
the appointment of receivers for the assets of Lycra's parent. 
    Ruyi and Lycra did not respond immediately to requests for
comment on Tuesday. 
    Ruyi bought control of Lycra from U.S. conglomerate Koch
Industries for $2.6 billion in 2019, borrowing about $1 billion
for the deal.
    Reuters reported in 2020 that some of Ruyi's creditors had
hired a restructuring specialist to sound out potential buyers
for Lycra after weakening financial performance of the
manufacturer of the eponymous stretchy material fears of a loan
default.
    However, no deal materialised and Ruyi decided to look for
alternative means of rescue. 
    Ruyi, the roots of which are in the textiles industry, began
a buying spree in 2015 that included SMCP, Aquascutum and Savile
Row tailor Gieves & Hawkes, aiming to establish itself as a
luxury fashion house. 
    But the Chinese conglomerate has struggled under the weight
of its debts and its financial difficulties worsened with the
COVID-19 pandemic.
    French fashion group SMCP last month removed five board
members associated with Ruyi after the conglomerate defaulted on
bonds used to acquire shares in the French business.
 urn:newsml:reuters.com:*:nL1N2TU1IZ 
    

 (Reporting by Selena Li
Additional reporting by Sophie Yu in Beijing
Editing by David Goodman)
 ((Selena.Li@thomsonreuters.com; +852 39525868;))