China Food

Ruixing is reborn, and the capital behind it has become the actual controller, repeating the Starbucks story


after Ruixing’s fraud scandal, the capital ended up in person.
Ruixing coffee is destined to be recorded in the history of Chinese business.
It took only 17 months from the opening of the first store to the listing. After the listing, it raised nearly $1.6 billion, with a maximum market value of $12billion, creating a double myth of speed and market value.
But soon, the “myth” piled up by false transactions was broken. Ruixing coffee only took 13 months from listing to delisting. When delisting, its market value was only US $350million, only 2.9% of the market value peak.
Ruixing coffee entered the powder market after delisting in July 2020, with an initial price of about US $0.95. According to the data analyzed by remake, a subsidiary of pioneer state, Ruixing coffee currently has a share price of $14.45 in the powder market, with a market value of $4.176 billion, which is nearly 12 times the market value at the time of delisting.
Since its inception, Ruixing coffee has been tied to the rocket propelled by capital. The outbreak of fraud scandal has also pulled the capital behind it into the abyss. After nearly two years of restructuring, Ruixing coffee has cleared all the baggage of the past. Nowadays, the actual controller and shareholding structure behind Ruixing coffee, which is light loaded, are also quite different from those in the past.
Pre IPO crazy financing,
However, the founding team firmly holds the actual control
According to the data analyzed by remake, a subsidiary of pioneer state, Ruixing coffee has completed four rounds of financing (including IPO), with a total amount of more than US $1billion.
Such a huge amount of financing does not affect the control of the founding team over the company. According to the prospectus before the listing of Ruixing coffee, chairman luzhengyao held 30.53%, his sister held 12.4%, CEO Qian Zhiya held 19.68%, Dazheng capital held 11.9% and pleasure capital held 6.75%.
After the fraud scandal,
Capital quickly becomes the actual controller
In april2020, Ruixing fraud scandal broke out.
In July, 2020, the equity of Ruixing coffee controlled by luzhengyao family through Haode and other entities was adjudicated by the court of British Virgin Islands to be entrusted and liquidated by KPMG due to the sharp decline of share price and the default of pledge loan.
In September, 2020, with the promotion of Dazheng capital and other shareholders, Ruixing coffee’s board of directors completed the reorganization and bid farewell to luzhengyao era. Guojinyi, who had previously served briefly as assistant to luzhengyao in China, joined the board of directors and served as CEO.
At the end of 2020, Ruixing coffee reached a settlement agreement with SEC on a fine of 180million US dollars, eliminating the regulatory risk from the United States.
In February, 2021, as part of the debt restructuring process, Ruixing coffee declared bankruptcy in New York.
In March, 2021, Ruixing coffee said that it had reached a restructuring agreement (RSA) with major bondholders, including financing of US $250million.
On April 15, 2021, Ruixing announced that it had reached a new financing agreement with an entity under Dazheng capital, the existing major shareholder of the company, and pleasure capital, and Dazheng capital would lead the investment in this round of financing. Of the $250million raised this time, $240million came from Dazheng capital and $10million from pleasure capital.
At the end of January 2022, Dazheng capital, together with IDG capital and Ares SSG capital management (a large PE in the United Arab Emirates), completed the acquisition of the equity of Ruixing coffee entrusted by KPMG, the creditor’s right custodian of the original fraud management, and the equity of the original fraud management was liquidated, which is no longer related to Ruixing coffee.
According to the annual report released by Ruixing coffee in April this year, as of April 10, 2022, Dazheng capital held about 33.9% of the equity and 57% of the voting rights of Ruixing coffee. Dazheng capital has become the actual controller and controlling shareholder of Ruixing coffee.
Survival, reputation, to the company and
The optimistic coffee market makes the capital end up in person
Since the fraud scandal broke out, Ruixing coffee has faced the dilemma of sharp decline in share price, tangled in lawsuits and possible bankruptcy at any time. But why is the capital behind it willing to save the market with real money?
According to media calculations, in the previous financing of Ruixing coffee, the total investment of Dazheng capital was about 500million US dollars, and the total investment of pleasure capital was nearly 100million US dollars.
Pleasure capital has publicly stated that it has never sold the shares of Ruixing coffee. If you don’t want to lose your previous investment, you have to save Ruixing. As long as Ruixing comes back from the dead, happy capital may still get a return.
According to public information, since the listing of Ruixing coffee, Dazheng capital has reduced its holdings twice and said that it has recovered the original investment cost of Ruixing capital. Although the cost has been recovered, Dazheng capital still holds 8.59% of Ruixing coffee after the two reductions. Without rescuing Ruixing, these shares have the risk of returning to zero.
After Ruixing’s fraud scandal, daxheng capital and pleasure capital, once star investment institutions, fell into a double crisis of survival and reputation due to their too close binding relationship with luzhengyao. On the day of Ruixing thunderstorm, joy capital lost $170million in its market value overnight, and Dazheng capital urgently stopped the fund-raising of the current period. The two funds, which had made frequent and high-profile statements before, have since entered a dormant period.
Ruixing coffee must be saved, whether for the sake of practical interests or for its own reputation.
In addition, there is a long-term positive view of Ruixing coffee and its coffee market.
Despite the short-term difficulties, the operation of Ruixing coffee has been gradually on the right track. The latest financial report released on the evening of May 24 showed that Ruixing’s total net income in the first quarter of this year was 2.404.6 billion yuan, an increase of 89.5% year-on-year; The operating profit of the company became positive for the first time, realizing overall profit; The number of stores has increased to 6580, surpassing Starbucks as the largest coffee chain brand in China; The monthly average number of trading customers was 16million, an increase of 83% year-on-year.
In the past two years, the financing of the coffee track has been hot. Tims, manner, m stand, three and a half tons, etc. have successively completed large-scale financing. According to the analysis and statistics of remake, a subsidiary of pioneer state, there were nearly 20 financing events for the coffee track in 2021, with a total amount of nearly 6billion yuan.
In addition, Li Ning, PetroChina, Sinopec, China Post and other “laymen” also went off to make coffee.
No old gates
There is no Starbucks
Coincidentally, as the “foreign master” of Ruixing coffee, Starbucks cannot be born without the help of the capital behind it.
Starbucks was originally a small company that only sold coffee beans and coffee machines. It did not sell coffee. The three founders were Jerry Baldwin, ZEV Siegl and Gordon Bowker. Howard Schultz was an employee of Starbucks at first. Because he wanted to open a coffee shop, he did not agree with the ideas of the three founders. Howard chose to leave Starbucks and founded a coffee shop called Tiantian coffee.
Later, Starbucks sought to sell due to poor management, hoped that Howard would buy it at the price of $3.8 million, and gave Howard three months to raise funds.
But two months later, Howard was told that someone had offered $4million to buy Starbucks. The acquirer was Sam stroum, one of the shareholders who invested in Tiantian coffee, a local business celebrity in Seattle.
When the depressed Howard was venting on the basketball court, he met a young lawyer by chance and met the father of Microsoft founder Bill Gates through this lawyer.
With the help and direct investment of Bill Gates’ father, Howard completed the acquisition of Starbucks with the help of local capital.
There are different versions of how Gates Sr. helped Howard.
According to the New York Times version, Gates Sr. rushed into Sam stroum’s office and said, “you can’t steal this child’s opportunity. Let it go now!”!
According to the journal version, Gates Sr. stormed into Sam stroum’s office and roared. You should be ashamed of yourself. Then he patted Howard on the shoulder and said, give you a chance for the American dream.
When Howard retired for the first time in 2000, he said that if it were not for Gates Sr., there would be no Starbucks.
作者:海腰;来源:创业邦(ID:ichuangyebang),转载已获得授权。
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