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Luckin Coffee Shares Jump Premarket On Investment Agreement

Updated: 15 Apr 2021

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.

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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