Luckin Coffee picks Houlihan Lokey for financial, strategic advice - sources

Luckin Coffee

23/06/2020 11:06

By Tom Arnold and Arno Schuetze
    LONDON/FRANKFURT, June 23 (Reuters) - Luckin Coffee  LK.O 
has picked investment bank Houlihan Lokey  HLI.N  as an adviser,
according to sources close to the matter, following an
accounting scandal that has seen the Chinese coffee chain's
shares plummet and creditors pursue assets held by the firm's
family.
    Houlihan Lokey's remit will be to provide financial and
strategic advice, one source said.
    A Cayman Islands court last week granted lenders, led by
Credit Suisse, a court order to wind up Primus Investments Fund
and Mayer Investments Fund, entities holding shares in Luckin
Coffee and ultimately controlled by the family of the coffee
firm's Chairman Charles Zhengyao Lu.
    The lenders are seeking to recover about $324 million of
outstanding debt, according to a Cayman Islands court filing.
    Luckin's fortunes have crashed since an internal probe
showed much of its 2019 sales was fabricated and overestimated
by 2.2 billion yuan ($311.31 million).
    Houlihan Lokey has experience with advising other companies
in financial distress. It was last week appointed by troubled
German tech firm Wirecard  WDIG.DE  to assess its options and is
advising the founder of United Arab Emirates-based hospital
operator NMC Health  NMC.L .  urn:newsml:reuters.com:*:nFWN2DW0CM
    Luckin Coffee and Houlihan Lokey were not immediately
available for comment.
    Nasdaq-listed Luckin Coffee's shares fell 11% on Monday
after IFR reported shareholders will vote to oust Lu and other
directors at an extraordinary general meeting on July 5. The
stock, which was halted from April 7 to May 19, has lost around
85% of its value since the probe was revealed.  urn:newsml:reuters.com:*:nL4N2DZ310

($1 = 7.0670 Chinese yuan renminbi)

 (Additional reporting by Scott Murdoch in Hong Kong and Sophie
Yu in Beijing; Editing by Ed Osmond)
 ((Tom.Arnold@thomsonreuters.com; +442075428510; Reuters
Messaging: tom.arnold.thomsonreuters.com@reuters.net))