By Tom Arnold and Arno Schuetze
LONDON / FRANKFURT (Reuters) – Luckin Coffee (LK.O) has chosen investment bank Houlihan Lokey (HLI.N) as its advisor, according to sources familiar with the matter, following an accounting scandal that saw the Chinese coffee chain shares plummet and creditors sue assets held by the company’s family.
Houlihan Lokey’s mission will be to provide financial and strategic advice, a source said.
A Cayman Islands court last week granted the lenders, led by Credit Suisse, a court order to liquidate Primus Investments Fund and Mayer Investments Fund, entities holding shares in Luckin Coffee and ultimately controlled by the president’s family. of the coffee company, Charles Zhengyao Lu.
Lenders are seeking to collect about $ 324 million in unpaid debts, according to a Cayman Islands court filing.
Luckin’s fortunes have collapsed since an internal investigation showed that a large chunk of his 2019 sales were manufactured and overestimated by 2.2 billion yuan ($ 311.31 million).
Houlihan Lokey has experience advising other companies in financial difficulty. He was appointed last week by struggling German tech company Wirecard (WDIG.DE) to assess his options and advises the founder of United Arab Emirates-based hospital operator NMC Health (NMC.L).
Luckin Coffee and Houlihan Lokey were not immediately available for comment.
Shares of Luckin Coffee, listed on the Nasdaq, fell 11% on Monday after the IFR announced that shareholders will vote to oust Lu and other directors at a special general meeting on July 5. The stock, which was suspended from April 7 to May 19, lost around 85%. of its value since the probe was revealed.
($ 1 = 7.0670 yuan Chinese renminbi)
(Additional reporting by Scott Murdoch in Hong Kong and Sophie Yu in Beijing; Editing by Ed Osmond)