Luckin Coffee has chosen Houlihan Lokey, a US investment bank, as an adviser, according to people familiar with the matter, Reuters reported. The move comes after an accounting scandal over Luckin Coffee sent the company’s share price plummeting and creditors demanded the liquidation of the assets of the company’s chairman, Lu Zhengyao. People familiar with the matter said Mr. Walliams’ mandate was to provide financial and strategic advice, and the investment bank had experience advising other companies in financial distress.
Last week, Walliams was appointed by the troubled German technology company Wirecard to evaluate the company’s options and is advising NMC Health, the UAE hospital operator.
Luckin Coffee and Walliams have yet to comment.
Last week, credit linelenders won a court order targeting an entity controlled by The Family of Lu Zhengyao, the chairman of Luckin Coffee, which is trying to recover $324.1 million in outstanding debt. According to the Cayman Islands court ruling on the 16th, the judge will approve the order to liquidate the two entities Primus Investments Fund and The Mayer Investments Fund holding stake in Luckin Coffee. The ultimate control of the two entities is in the hands of the Lu Zhengyao family.
Luckin Coffee will hold a special general meeting on July 5th, when shareholders will vote to oust Lu Zhengyao and other directors. Luckin Coffee has previously come under the reveal after an internal investigation revealed that company executives falsified 2019 sales and misrepresented 2.2 billion yuan ($311 million) in transactions. Since the survey was announced, Luckin Coffee’s share price has fallen about 85 percent.