The default followed almost immediately after Luckin disclosed that its head of operations had fabricated billions of RMB worth of sales for most of 2019.
If the deal proceeds, Luckin founder Charles Lu and his family will receive up to HK$1.37 billion, likely to be put toward the company’s cash crunch.
Luckin responded Monday to fraud allegations from an anonymous report publicized by short seller Muddy Waters on Friday.
The CEO, COO, and many other employees of China coffee chain Luckin Coffee have been fired after the company admitted to accounting fraud in April.
Luckin looks to fund its aggressive growth tactics including a vending machine initiative, and expansion into other consumables and overseas markets.
Naixue’s Tea, one of China’s largest tea beverage chains, is reportedly looking to raise $400 million in a US IPO as early as this year.
Luckin is being investigated in the US for defrauding investors amid pressing concerns to recoup a dropoff in sales as a result of Covid-19.
Luckin Coffee is offering a $400 million bond and issuing new shares less than a year after its Nasdaq IPO.
Luckin Tea will launch a separate app and a mini-program focused on lower-tier cities.
China’s Beijing Automotive Group (BAIC) is seeking to buy a stake of up to 21.26% in Car Inc, a Hong Kong-listed car rental company formed by Luckin Coffee chairman Charles Lu.