CREDITORS of fashion conglomerate Shandong Ruyi Technology Group will seek control of Lycra after Ruyi defaulted on a US$400 million loan it took from them to buy the fibre maker.

A statement from the creditors Monday said that Ruyi, known for its ambition to become the LVMH of China, has not been able to repay the Lycra loan since May 2019.

The lenders include China Everbright Ltd. and Tor Investment Management, along with Seoul-based private equity firm Lindeman Partners and its affiliate Lindeman Asia. Their steps to assume full equity control of Lycra include the appointment of receivers for the assets of Lycra’s parent.

Ruyi and Lycra did not respond immediately to requests for comment Tuesday.

Ruyi bought control of Lycra from U.S. conglomerate Koch Industries for US$2.6 billion in 2019, borrowing about US$1 billion for the deal.

Reuters reported in 2020 that some of Ruyi’s creditors had hired a restructuring specialist to sound out potential buyers for Lycra after weakening financial performance of the manufacturer of the eponymous stretchy material fears of a loan default.

However, no deal materialized and Ruyi decided to look for alternative means of rescue. (SD-Agencies)