Goldman Sachs: 76.35 million ads forced to be sold due to default of shareholders of Ruixing coffee


According to foreign media reports, Goldman Sachs today released a report saying that Haode, the shareholder of Ruixing coffee After the default of the investment company (borrower), according to a US $518 million margin loan arrangement, the bank consortium composed of the lender has instructed Credit Suisse Singapore Branch, as the Security Trustee, to exercise the lender’s rights on the mortgage, i.e. to adopt the enforcement procedure, involving 76350094 shares of Ruixing coffee American Depository shares (ads).
According to the report, a total of 515355752 shares of Ruixing coffee’s class B common shares and 95445000 shares of class a common shares were pledged, including additional Pledged Shares of entities controlled by the family trust of Qian Zhiya, CEO of Ruixing coffee.
The borrower is controlled by the family trust of Lu Zhengyao, chairman of the board of directors of Ruixing coffee. The loan arrangement has full recourse to Lu Zhengyao and his spouse. In exercising its rights under the facility, the lender has initiated enforcement proceedings against the collateral to meet the borrower’s obligations under the facility, including the conversion of Ruixing coffee’s class B common shares into ads.
There are no lock-in restrictions on the class a common shares or ads of lucky coffee. Assuming that all shares pledged by the loan arrangement are sold, Lu Zhengyao’s voting rights and interests in Ruixing coffee will not be reduced, but the beneficial and voting rights and interests of Qian Zhiya will be significantly reduced.
Under the Federal Securities Act, these securities are freely transferable and the sale of these securities does not require the registration of securities under the Federal Securities Act. Through the agent, lenders are expected to sell these securities in one or more open market and / or closed transactions, depending on market conditions.
At the moment, there is no guarantee how many shares will be sold and no agent has committed to buy them. The various affiliates of the lender may be purchasers of these shares. Neither Ruixing coffee nor Lu Zhengyao will participate in or otherwise participate in the sale of the shares; the agent will sell the shares only on the basis of public information. (Li Ming)