Ruixing fell below $ 2 before the market, and Lu Zhengyao’s private company was sued for liquidation

Ruixing Coffee (LK.US) fell another 7.46% before the market today, and the pre-market price fell below $ 2 to the latest report of $ 1.86. After the company plunged 28.72% yesterday, it closed at US $ 2.01 yesterday, and the latest market value is only US $ 509 million. Since the resumption of trading on May 20, Ruixing’s stock price has fallen 54% in two days. Since the beginning of this year, the company’s stock price has fallen 95%.
(Source: Straight Flush)
According to the latest news, foreign media reports that Lu Zhengyao, chairman of Ruixing Coffee, is in a loan dispute with banks such as Credit Suisse. According to the British Virgin Islands government announcement, Credit Suisse Bank filed a lawsuit in court to liquidate Lu Zhengyao ’s private company Haode Investments Co.
Previously, several banks (including Goldman Sachs), which used Credit Suisse as a guarantee agent, had borrowed $ 518 million in secured financing from Haode Investments Co. (guaranteeed by Ruixing shares), but Haode did not repay the loan.
According to the announcement of Goldman Sachs on April 6, the bondholders have obtained control of the pledged shares and instructed Goldman Sachs to supervise the sale of these shares, but the stock of Ruixing was suspended. The announcement states that Credit Suisse will exercise the rights of the lender against the collateral (take enforcement procedures), involving a total of 76.35 million shares of Ruixing Coffee American Depositary Shares (ADS).
However, things do not seem to be resolved. Credit Suisse still brought Haode to court recently. It is reported that the hearing will be held on June 8 in Totra Island. Credit Suisse has advised Grant Thornton as the liquidator of Haode.
Informed sources said that in addition to Credit Suisse Bank and Goldman Sachs, the bondholders also include Morgan Stanley, Barclays, CICC and Haitong International Investment. Among them, Haitong International loaned 140 million US dollars, and Morgan Stanley and Credit Suisse each loaned about 100 million US dollars.
But so far, neither Ruixing nor Credit Suisse have commented on the report.
On the same day that Nasdaq was ordered to be delisted on May 20, Lu Zhengyao issued a “Personal Statement”, stating that Nasdaq required the company to delist without waiting for the final investigation result, which he deeply regretted. Lu Zhengyao also claimed that the funds from the pledge of Ruixing Coffee stocks have all been used to support the business development of its subsidiaries, not used for personal squandering, nor transferred assets, and willing to accept any investigation.
While the chairman was involved in loan disputes, Ruixing also recently reported layoffs. Earlier on the Internet, there was a claim that Ruixing Xiamen Employee Exploitation Company started to lay off employees, with a minimum of 50% and a maximum of 90% in various departments. The company responded that it was job optimization.