Lycra’s Bondholder Group Looking for More Transparency in Ruyi-Huayang Joint Venture

After a joint venture between Shandong Ruyi Technology Group and Huayang New Material Technology Group, a group of Lycra bondholders are looking for more clarity due to the suspected use of Lycra’s intellectual property and potential technology transfer for a construction project between Ruyi and Huayang. Lycra suspects that their branding and technology is going to be leveraged for the project without authorization. These complications came after Huayang and Ruyi signed a framework agreement to institute fiber material manufacturing facilities including one for Lycra that could produce 60,000 tonnes of spandex per year by December 2021. 

Additionally, as part of the deal between Ruyi and Huayang, Lycra was aimed to be listed on China’s STAR board if Huayang provided RMB 2.5 billion to Ruyi in exchange for an equity interest in the U.S. spandex company as well as RMB 3 billion worth of intellectual property rights and RMB 7 billion worth of offtake contracts. The bondholder group at Lycra were alerted that Ruyi had received part of the RMB 2.5 billion proceeds giving them reason to believe that intellectual properties had been sold by its Chinese parent. Ruyi also recently told some Lycra bondholders that they are looking to float Lycra on the Hong Kong stock exchange instead of the Shanghai tech board, but bondholders are skeptical that this will ever happen. Read our full analysis of the Lycra bondholder group situation here: https://reorg.com/lycras-ad-hoc-bondholder-group-seeks-clarity-on-ruyi-huayang-joint-venture/