US private equity firm Warburg Pincus plans to lift its stake in a Chinese car rental company whose chairman founded the Luckin Coffee chain now at the centre of an accounting scandal.
The firm is spending about $145m to increase its share in Hong Kong-listed China Auto Rental from 11 per cent to more than 17 per cent, in two separate transactions, according to stock exchange filings and several people familiar with the matter. CAR owns a stake in UCAR, a chauffeur car service.
Warburg first invested in CAR, which is chaired by Luckin founder Lu Zhengyao, almost a decade ago and has held a small stake ever since. CAR’s share price has been hammered by the fallout from the Luckin scandal as investors deserted businesses linked to Mr Lu.
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