Luckin spill will get China coffee war brewing

Luckin Coffee

25/05/2020 02:39

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Pete Sweeney
    HONG KONG, May 25 (Reuters Breakingviews) - The reeling
chain once worth $12 bln is getting booted off the Nasdaq for
fraud. Its brand might be toxic, but it has assets and ideas
that Yum China, Tim Hortons and HeyTea could buy or adapt. Such
deep-pocketed competitors may present a more formidable
challenge to Starbucks.
    Full view will be published shortly.
    On Twitter https://twitter.com/petesweeneypro 
    
    CONTEXT NEWS
    - Banks that lent $518 million to Luckin Coffee Chairman
Charles Zhengyao Lu have started court proceedings to liquidate
his private company, Reuters reported on May 22. Lenders include
Credit Suisse, Goldman Sachs, Morgan Stanley, Barclays, Haitong
Securities and China International Capital Corp.
    - Luckin Coffee shares slumped 36% on May 20 after they
resumed trading for the first time in over a month, since the
company disclosed potentially fraudulent sales figures, and a
day after it said it had received a delisting notice from
Nasdaq.
    - Tim Hortons China said on May 12 it received an investment
from Chinese tech giant Tencent, as the Canadian coffee brewer
seeks to expand in the People’s Republic.
    - Yum China said on April 29 that it has formed a coffee
shop joint venture with Italy’s Lavazza in China.   
    -  For previous columns by the author, Reuters customers can
click on  SWEENEY/ 
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Nasdaq informs China's Luckin Coffee it plans to delist it   
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BREAKINGVIEWS-China’s tough Luckin line faces deaf U.S. ears   
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 (Editing by Jeffrey Goldfarb, Jamie Lo and Sharon Lam)
 ((pete.sweeney@thomsonreuters.com; Reuters Messaging:
pete.sweeney.thomsonreuters.com@reuters.net))