Lycra (莱卡) files for prepackaged bankruptcy as creditor group moves to take control

What happened

Lycra (莱卡), the world’s dominant spandex/elastic-fiber maker and the owner of the red-waved “Lycra” tag, has filed for prepackaged bankruptcy protection, it has been reported. The filing comes after a seven‑year chain of leveraged deals and distress that began when Shandong Ruyi Group (如意集团) acquired the business from Koch Industries in 2019 for roughly $2.6 billion. Creditors that took control of the company in 2022 — including Korea’s Lindeman Partners, Hong Kong’s Tor Investment Management and China Everbright (光大) — are the architects of a restructuring that would convert more than $1.2 billion of claims into equity and cut total debt from about $1.53 billion to roughly $330 million.

Why it matters

Lycra’s troubles are both financial and structural. The company cites falling utilisation (from ~80% in mid‑2024 to ~60% by end‑2025) and a projected EBITDA decline from about $132 million in 2024 to $44 million in 2026. Global raw‑material cost inflation, aggressive capacity expansion by Asian rivals and a slide in spandex prices to near cash‑cost levels have squeezed margins. It has been reported that disputes over asset transfers and alleged stripping of Chinese assets by Ruyi before creditors seized control further damaged Lycra’s business in China, a market that accounted for about 29% of revenue in the 2025 fiscal year.

This filing also underscores how an “ingredient” brand — a chemical input that became a consumer hallmark through what DuPont famously called “ingredient branding” — can be swept up in geopolitical and financial risk. The 2019 acquisition left legacy debt that was subsequently financed with high‑cost instruments (including PIK notes with rates reported at about 16%), producing a debt burden that became unsustainable as market conditions worsened. The prepack aims to stabilise the company and preserve operations; Lycra’s filings say supply, payroll and customer deliveries will not be disrupted during the restructuring.

So what next? If approved by the bankruptcy court, control will shift to an international financial consortium including Lindeman Asia and other funds, and the firm will emerge with a much lower leverage profile to invest in R&D and capacity upgrades. For Western readers unfamiliar with China’s cross‑border deal wave, this episode is a cautionary tale: ambitious overseas expansion plus heavy leverage can spectacularly amplify risks — and global brands familiar from athletes’ kits and even space suits are not immune.