Remember Chinese coffee chain Luckin Coffee (OTC: LKNCY)…
The company’s share price is rising premarket, up 10.4% at $10.56 after it announced it has entered into an investment agreement with a Centurium Capital affiliate as the lead investor and Joy Capital.
The two are private equity investment firms in China and current shareholders of Luckin.
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Centurium Capital has agreed to an investment through a private placement, totalling approximately $240 million in senior convertible preferred shares. Through a private placement, Joy Capital has agreed to an investment totalling roughly $10 million in senior preferred shares.
Both investment firms may be able to upsize on a pro-rata basis for an additional $150 million.
The closing of the deal is subject to several conditions, including implementing a restructuring of Luckin Coffee’s $460 million 0.75% Convertible Senior Notes due 2025.
Luckin said it plans to use the proceeds to facilitate its proposed offshore restructuring and fulfil its obligations under a recently announced settlement with the U.S. Securities and Exchange Commission (SEC).
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