Luckin Coffee gets $250 million investment from Centurium, Joy

By Sarah Lizee

Olympia, Wash., April 16 – China’s Luckin Coffee Inc. has entered into a $250 million investment agreement with an affiliate of Centurium Capital as lead investor and Joy Capital, according to a press release.

Both Centurium Capital and Joy Capital are private equity investment firms in China and current shareholders of the company.

Centurium Capital has agreed to an investment, through a private placement, totaling about $240 million in senior convertible preferred shares of the company, and Joy Capital has agreed to an investment, through a private placement, totaling about $10 million in senior preferred shares.

Centurium Capital and Joy Capital may be able to upsize on a pro rata basis for an additional $150 million, under some circumstances.

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 in line with the terms of its previously announced restructuring support agreement.

Luckin Coffee plans to use the proceeds of the investment to facilitate the company’s proposed offshore restructuring and fulfill its obligations under a settlement with the 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,” Luckin Coffee said in the release.

Negotiations between Luckin Coffee, Centurium Capital and Joy Capital were supported throughout by the company’s financial adviser, Houlihan Lokey (China) Ltd., legal advisers, Davis Polk & Wardwell LLP and Harney Westwood & Riegels, and the joint provisional liquidators, Alexander Lawson of Alvarez & Marsal Cayman Islands Ltd. and Wing Sze Tiffany Wong of Alvarez & Marsal Asia Ltd.

The coffee chain is based in Beijing. The company filed Chapter 15 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Feb. 5 under case number 21-10228.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.