Luckin Coffee Completes Financing Milestone Under Restructuring Support Agreement

Rhea-AI Summary

Luckin Coffee Inc. (OTC:LKNCY) announced the completion of a significant Financing Milestone related to a restructuring support agreement with holders of its US$460 million 0.75% Convertible Senior Notes due 2025. The company successfully navigated the PRC regulatory approval process, receiving necessary clearances to transfer funds outside China through a planned capital reduction. Approximately 94% of the Note holders have agreed to the restructuring terms, marking a critical step in Luckin Coffee's ongoing financial restructuring.

Positive

• Completion of Financing Milestone under the restructuring support agreement.
• Successfully obtained PRC regulatory approvals for fund transfer.
• 94% of Note holders agreed to restructuring terms.

Negative

• None.

BEIJING, June 15, 2021 (GLOBE NEWSWIRE) -- Luckin Coffee Inc. (in Provisional Liquidation) (“Luckin Coffee” or the “Company”) (OTC:LKNCY) today announced that it has completed the Financing Milestone (as defined below), as contemplated under the restructuring support agreement (“RSA”) entered into with holders of Luckin Coffee’s US$460 million 0.75% Convertible Senior Notes due 2025 (the “Notes”).

As previously announced, the RSA requires the Company to obtain reasonable assurance of funding outside of the People’s Republic of China (“PRC”) in an amount sufficient to satisfy the cash consideration to be distributed to the holders of the Notes under the RSA by June 14, 2021 (the “Financing Milestone”). The Company has completed the PRC regulatory approval process, including obtaining relevant approvals from The State Administration of Foreign Exchange (“SAFE”) 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. The completion of the approval process satisfies the Financing Milestone under the RSA.  

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.

Safe Harbor Statement

This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “potential,” “continue,” “ongoing,” “targets,” “guidance” and similar statements. Luckin Coffee may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties, including Joint Provisional Liquidators. Any statements that are not historical facts, including statements about Luckin Coffee’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the expense, timing and outcome of existing or future legal and governmental proceedings, investigations in connection with Luckin Coffee; the outcome and effect of the ongoing restructuring of Luckin Coffee’s financial obligations; Luckin Coffee’s growth strategies; its future business development, results of operations and financial condition; the effect of the non-reliance identified in, and the resultant restatement of, certain of Luckin Coffee’s previously issued financial results; the timing of the completion or outcome of the audit of Luckin Coffee’s financial statements; the effectiveness of its internal control; its ability to retain and attract its customers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with its suppliers and business partners; trends and competition in China’s coffee industry or China’s food and beverage sector in general; changes in its revenues and certain cost or expense items; the expected growth of China’s coffee industry or China’s food and beverage sector in general; PRC governmental policies and regulations relating to Luckin Coffee’s industry; the potential effects of COVID-19; and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks, uncertainties or factors is included in Luckin Coffee’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Luckin Coffee undertakes no obligation to update any forward-looking statement, except as required under applicable law.

About Luckin Coffee

Luckin Coffee (OTC:LKNCY) has pioneered a technology-driven retail network to provide coffee and other products of high quality, high affordability, and high convenience to customers. Empowered by big data analytics, AI, and proprietary technologies, Luckin Coffee pursues its mission to be part of everyone’s everyday life, starting with coffee. Luckin Coffee was founded in 2017 and is based in China. For more information, please visit investor.luckincoffee.com.

Investor and Media Contacts

Investor Relations:
Luckin Coffee IR
Email: ir@luckincoffee.com

Bill Zima / Fitzhugh Taylor
ICR, Inc.
Phone: 646 880 9039

Media Relations:
Luckin Coffee PR
Email: pr@luckincoffee.com

Ed Trissel / Jack Kelleher
Joele Frank, Wilkinson Brimmer Katcher
Phone: 212 355 4449

FAQ

What is the Financing Milestone completed by Luckin Coffee on June 15, 2021?

Luckin Coffee completed the Financing Milestone, confirming funding to satisfy cash distributions to holders of its Convertible Senior Notes.

What percentage of Note holders agreed to the restructuring terms of Luckin Coffee?

Approximately 94% of the Note holders have agreed to the restructuring terms.

What is Luckin Coffee's stock symbol?

Luckin Coffee's stock symbol is LKNCY.

What regulatory approvals did Luckin Coffee obtain for fund transfers?

Luckin Coffee received necessary approvals from the State Administration of Foreign Exchange (SAFE) of China.

What does the successful completion of the Financing Milestone mean for Luckin Coffee?

It marks a critical step in Luckin Coffee's financial restructuring and ensures the company can meet obligations to its Note holders.