BEIJING, China — Luckin Coffee Inc. (in Provisional Liquidation) today announced that it has entered into an investment agreement (the “Investment Agreement”) with an affiliate of Centurium Capital (“Centurium Capital”), as the lead investor, and Joy Capital. Both Centurium Capital and Joy Capital are leading private equity investment firms in China and current shareholders of the Company.
Pursuant to the Investment Agreement, (i) Centurium Capital has agreed to an investment, through a private placement, totaling approximately US$240 million in senior convertible preferred shares of the Company (“Senior Preferred Share(s)”), and (ii) Joy Capital has agreed to an investment, through a private placement, totaling approximately US$10 million in Senior Preferred Shares (collectively, the “Transactions”).
Under certain circumstances, Centurium Capital and Joy Capital may be able to upsize on a pro rata basis for an additional US$150 million.
The closing of the Transactions will be subject to a series of closing conditions, including the implementation of a restructuring of Luckin Coffee’s $460 million 0.75% Convertible Senior Notes due 2025 through a scheme of arrangement under section 86 of the Cayman Islands Companies Act (2021 Revision) in accordance with the terms of the recently announced restructuring support agreement.
A summary of key terms of the Transactions is attached as Exhibit 99.2 to the Current Report on Form 6-K furnished by the Company today.
Luckin Coffee plans to use the proceeds of the investment to facilitate the Company’s proposed offshore restructuring and fulfill its obligations under its recently announced settlement with the U.S. Securities and Exchange Commission. The Transactions allow the Company to focus its balance sheet on the continued execution of its business plan, focused on growing the core coffee business and achieving its long-term growth targets.
Negotiations between Luckin Coffee, Centurium Capital and Joy Capital were supported throughout by the Company’s financial advisor, Houlihan Lokey (China) Limited, legal advisors, Davis Polk & Wardwell LLP and Harney Westwood & Riegels, and the Joint Provisional Liquidators, Mr. Alexander Lawson of Alvarez & Marsal Cayman Islands Limited and Ms. Wing Sze Tiffany Wong of Alvarez & Marsal Asia Limited.