Photo/Zhang Xiaoqing (NBD)

Apr. 17 (NBD) -- Chinese car rental company CAR Inc. (0699.HK) announced Thursday that its biggest shareholder UCAR Inc. will sell up to 17.11 percent stake to another shareholder Amber Gem Holdings Limited ("Amber Gem").

Shares of CAR Inc. once soared up to 30.54 percent and closed 20.20 percent higher in Friday's trading.

According the agreement, Amber Gem on Thursday acquired 98.6 million shares of CAR Inc. from a wholly-owned subsidiary of UCAR Inc. at 2.3 HKD per share; Amber Gem will undertake conditional acquisition of up to 264 million shares at HKD 3.4 per share. Proceeds of the deals will be used to repay UCAR Inc's financing.

The two deals, respectively involving 4.65 percent and up to 12.46 percent of CAR Inc.'s total shares, are expected to make Amber Gem the biggest shareholder of CAR Inc. Amber Gem is a subsidiary of New York-based private equity firm Warburg Pincus, which invested in CAR Inc. in early rounds.

The controlling shareholder of UCAR Inc. of China is Lu Zhengyao, who is the chairman of both CAR Inc. as well as the scandal-ridden Luckin Coffee.

After revealing massive 2019 sales fabrication on April 2, shares of Luckin Coffee plummeted by over 83 percent before trading was suspended on April 9. The scandal led to a 54.42 percent dive of CAR Inc. and 21.75 dive of UCAR Inc. on the next day.

Lu Zhengyao has since sought to distance Luckin Coffee from a cluster of his other companies. According to a Financial Times report on April 8, Lu was considering stepping down as chairman of CAR Inc. to convince the company's independence from Luckin Coffee.

There were media reports that online travel agency Trip.com and automobile giant Geely were interested in taking over CAR Inc., but the reports were later denied by related parties.

Email: gaohan@nbd.com.cn