Luckin Coffee Says It Will Receive $240m Investment
China's Luckin Coffee Inc has said that it will receive a $240 million investment from two shareholders, as the coffee chain tries to recover from an accounting fraud last year that derailed its business.
Chinese private equity firm Centurium Capital will lead the investment in exchange for preferred shares, while Joy Capital will also participate, the company said.
The company said that the firms have the option to raise their investment by an additional $150 million.
Xiamen-based Luckin had positioned itself as an ambitious home-grown challenger to US coffee giant Starbucks Corp, but said last April that as much as 2.2 billion yuan ($337.31 million) in 2019 sales had been fabricated.
The company, which was fined $180 million by the US Securities and Exchange Commission, said in February that it was seeking protection under Chapter 15 of the US Bankruptcy Code to facilitate the restructuring of its debt.
Investment Use And Closing Conditions
The new investment will be used to help pay off the fine and grow its core coffee business and is subject to a series of closing conditions, including the implementation of a restructuring of $460 million worth of bonds, Luckin said.