How a high-society Chinese family’s takeover of French luxury brand Baccarat unravelled into a boardroom battle with creditors and seizure of assets

French court takes Baccarat into protective custody; creditors plan to seize assets, including a Hong Kong flat

Wave of Chinese acquisitions from 2016 to 2018 led to defaults and bankruptcy, with Fosun losing Cirque du Soleil and creditors wiping out HNA’s stake in Swissport

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Rock star Lenny Kravitz to the right of Baccarat owner Coco Chu and its ex-CEO Daniela Riccardi at the Baccarat Goldfinger party in Paris on September 8, 2017. Photo: Getty Images

Published: 6:30pm, 8 Sep 2020Updated: 8:49pm, 10 Sep 2020

French luxury firm Baccarat has survived the Spanish flu, two world wars and the 1789 French Revolution. Now the changing fortunes of its distressed Chinese owner have prompted a French court to take the crystal maker into protective custody.

Major shareholder Coco Chu has gone from partying with Lenny Kravitz at a Baccarat Goldfinger-themed party in Paris in 2017 to wrangling with creditors and being stripped of assets, including her multimillion-dollar flat in Hong Kong.

Euronext-listed Baccarat is the battleground between Chu’s family office, Fortune Fountain Capital, and its creditors. The Chinese borrower has fallen into arrears on loan repayments and broken French law by ignoring creditors’ proposals for new directors, people familiar with the situation said.

Fortune Fountain is just the latest example of a Chinese company that bought a string of trophy assets on credit and is now struggling to stay afloat as the coronavirus pandemic drains already stressed finances.

Baccarat chandelier and tableware. Photo: SCMP Handout

Between 2016 and 2018, Chinese firms went on a US$411 billion global shopping spree. When Beijing turned off the spigot of cheap bank loans in 2017, buyers turned en masse to private credit lenders in Hong Kong to finance their deals, which typically charge higher interest rates.

In recent weeks, two high-profile Chinese acquisitions were seized by lenders. China’s Fosun International lost control of Cirque du Soleil and embattled conglomerate HNA relinquished its stake in airport baggage handler Swissport to distressed debt funds.