US garment maker Lycra announced new ownership on Wednesday after creditors of former parent, Chinese fashion conglomerate Shandong Ruyi Technology Group (Ruyi), took equity control following a $400-million loan default.
The new owners include Hong Kong-based China Everbright, Tor Investment Management and Seoul-based private equity firm Lindeman Partners and its affiliate Lindeman Asia.
“We have implemented swiftly the proactive steps required to protect and strengthen the future of the Lycra company and to insulate the company fully from its former shareholder’s financial distress,” the new owners said in a statement.
Lycra chief executive Julien Born said in a separate statement: “The new ownership structure provides the necessary backing from experienced professionals who share our long-term vision.”
Representatives for Shandong Ruyi did not immediately respond to a request for comment.
Shandong Ruyi bought control of Lycra from US conglomerate Koch Industries for $2.6 billion in 2019, borrowing about $1 billion for the deal.
The Chinese fashion firm set out to create a global luxury clothing empire, embarking on a buying spree that included London-based suitmaker Aquascutum, Paris-based fashion house Cerruti 1881 and fashion group SMCP Group.
But the conglomerate has struggled under the weight of its debt and its financial difficulties worsened with the Covid-19 pandemic.
- Reuters with additional editing by Jim Pollard