Lululemon Founder Secures $500 Million in Loans with Stock Pledge
Athletica Lululemon, for the third time in less than a year, founder Chip Wilson offered shares in exchange for cash,
Quick overview
- Chip Wilson, founder of Lululemon, has offered shares in exchange for cash for the third time in less than a year.
- He secured a $315 million loan from the Royal Bank of Canada, partially backed by Lululemon shares.
- Earlier this year, Wilson arranged a deal with Citigroup for a loan involving approximately 330,000 Lululemon shares.
- Goldman Sachs also provided a $200 million loan last year, secured by Lululemon stock, raising questions about the use of these loans.
Athletica Lululemon, for the third time in less than a year, founder Chip Wilson offered shares in exchange for cash, enabling the billionaire to fund other projects and maintain his voting control over the yoga-wear company he founded nearly thirty years ago.
Wilson no longer needs to sell stock to access more than $500 million from various banks. Last week, Wilson obtained a $315 million loan from the Royal Bank of Canada, partially secured by Lululemon shares, according to an August 11 regulatory filing.
This transaction followed a deal with Citigroup Inc. in January, where the bank agreed to lend the billionaire approximately 330,000 Lululemon shares, valued at about $122 million at the time, with the option to repay with cash or shares. Last year, Goldman Sachs Group Inc. also agreed to provide a $200 million loan secured by Lululemon stock. These arrangements are disclosed in filings, but it is unclear from them whether he has misused the loans.
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