(Yicai Global) Dec. 15 -- The sale of UCAR’s remaining stake in China Auto Rental cuts the knot binding the country’s biggest car rental firm with its former parent, a company that has the same chairman as scandal-hit Luckin Coffee.

UCAR has completed the transaction, Beijing-based CAR said in a statement today. The sale brings to a conclusion a deal first broached in November.

South Korean private equity firm MBK Partners agreed to pay HKD1.8 billion (USD232 million) for UCAR’s 20.86 percent stake in CAR, priced at HKD4 (52 US cents) per share. That was more than an earlier buy-in by US PE firm Warburg Pincus, which paid HKD2.30 a share for 4.65 percent.

Before MBK’s offer was announced, CAR’s shares [HKG: 0699] had touched a 52-week low of HKD1.20. Today, they closed 1.3 percent higher at HKD3.81 (49 US cents) each, giving the company a market capitalization of just over HKD8 billion (USD1 billion).

CAR has been trying to distance itself from UCAR, whose chairman is Charles Lu. Lu’s Luckin Coffee confessed in April that its chief operations officer had tacked CNY2.2 billion (USD336 million) onto last year’s sales figure. CAR’s shares then halved in value in a single day.

The coronavirus pandemic has also made 2020 a difficult year for CAR. It had a first-half loss of CNY4.3 billion (USD657 million), compared with a CNY279 million (USD42.6 million) profit a year earlier. Revenue sank 26 percent to CNY2.8 billion.

Seoul-based MBK, which has more than USD22 billion assets under management mainly in at home and in China and Japan, plans to take the firm private, CAR said on Nov. 13. MVK already owns part of eHi Auto Services, China's second-largest car rental firm, and South Korea's biggest, Kumho Rent-a-Car.

Editor: Kim Taylor