Restaurants

Luckin Coffee announces restructuring agreement

Image courtesy of Luckin Coffee.

June 15, 2021

Luckin Coffee Inc., which filed for bankruptcy protection in February, has entered into a restructuring support agreement with holders of the company's $460 million 0.75% convertible senior notes due 2025, according to a press release.

Luckin Coffee, a pioneer in coffee vending and a competitor to Starbucks in China, previously entered into an investment agreement with a Centurium Capital affiliate and Joy Capital, both private investment firms in China,

The agreement requires the company to obtain reasonable assurance of funding outside of the People's Republic of China in an amount sufficient to satisfy the cash consideration to be distributed to the holders of the notes by June 14, 2021.

The company has completed the PRC regulatory approval process, including obtaining relevant approvals from The State Administration of Foreign Exchange of the PRC through a designated PRC foreign exchange handling bank to transfer such sufficient amount of funds out of the PRC through a planned capital reduction.

As of the date of this announcement, the holders of the notes who are party to the RSA collectively hold or control approximately 94% in aggregate principal amount of the notes.