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Luckin Coffee investor urges shareholders to oppose other investor’s plan

Image courtesy of Luckin Coffee.

December 3, 2021

A Luckin Coffee investor has asked shareholders and convertible bondholders to oppose a plan giving Centurium Capital, another investor, control of the company, according a Bloomberg News report. The company, a pioneer in coffee vending and a competitor to Starbucks in China, entered into a restructuring support agreement with shareholders earlier this year.

The company sold 295.4 million senior convertible preferred shares to Centurium Capital through a private placement, with aggregate gross proceeds of approximately $240 million, according to a press release issued Wednesday. Luckin Coffee also announced Joy Capital, another current shareholder, invested approximately $10 million in senior preferred shares, according to the press release.

Following Wednesday's announcements, Wu Naijia, a director at GS Wealth LP, said the plan adopted by Luckin would make it easier for Centurium Capital to control the company and take it private, according to a letter obtained by Bloomberg.

GS Wealth said it is a creditor to Luckin's special purpose vehicles and encouraged shareholders to cancel a general meeting on Dec. 11 to a vote on a proposed amendment to Luckin's articles of association.

The firm said Centurium has entered into an undisclosed share purchase agreement giving the firm 60% of Luckin's voting power.

Centurium and Luckin representatives did not respond to Bloomberg for requests for comment at the time of this report.