Luckin Coffee’s ‘light touch’ provisional liquidators discharged

By Sarah Lizee

Olympia, Wash., March 7 – Luckin Coffee Inc. announced Monday that under an order of the Grand Court of the Cayman Islands dated Feb. 25, the company’s winding up petition has been dismissed and the “light-touch” joint provisional liquidators of the company have been discharged from their duties effective Friday, bringing the company’s provisional liquidation to a close.

“Today’s announcement is the result of the remarkable work from the Luckin Coffee team and the outstanding support we have received from our creditors and stakeholders throughout this process,” Dr. Jinyi Guo, chairman and chief executive officer of Luckin Coffee, said in a press release.

“The successful completion of the provisional liquidation is yet another positive step for Luckin Coffee, and has allowed us to significantly reduce our debt burden and improve the company’s capital structure. Operating from a position of financial strength, we are focused on executing our growth strategy and continuing to deliver industry-leading services and products to our customers and long-term value for our shareholders.”

The discharge order was made following a consensual application by the relevant parties, and after the company’s previously announced restructuring of its $460 million 0.75% convertible senior notes due 2025 by way of a scheme of arrangement in the Cayman Islands.

As previously reported, the U.S. Bankruptcy Court for the Southern District of New York recognized and enforced the scheme in the United States under Chapter 15 of the U.S. bankruptcy code.

On March 4, the joint provisional liquidators filed a final report with the bankruptcy court and requested the entry of an order to close the Chapter 15 case.

Alexander Lawson of Alvarez & Marsal Cayman Islands Ltd. and Wing Sze Tiffany Wong of Alvarez & Marsal Asia Ltd. have served as the company’s Joint provisional liquidators since July 15, 2020.

In connection with the company’s debt restructuring and the scheme, Luckin Coffee is advised by Davis Polk & Wardwell LLP as legal counsel, Harney Westwood & Riegels as Cayman Islands legal counsel and Houlihan Lokey as financial adviser.

The joint provisional liquidators are represented by DLA Piper LLP (US) in the United States and Campbells LLP in the Cayman Islands.

Holders of existing notes may contact Houlihan Lokey at HL_Lake@HL.com or the joint provisional liquidators at luckin@alvarezandmarsal.com with any questions regarding the scheme and related proceedings.

The coffee chain is based in Beijing. The company filed Chapter 15 bankruptcy on Feb. 5, 2021 under case number 21-10228.

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