BEIJING, China – Luckin Coffee Inc. (in Provisional Liquidation) (“Luckin Coffee” or the “Company”) (OTC: LKNCY) announced yesterday that its scheme of arrangement (the “Scheme”) became effective on December 17, 2021 (the “Scheme Effective Date”).
The Scheme was proposed by Luckin Coffee with the support of its Joint Provisional Liquidators,¹ in relation to the restructuring of its US$460 million 0.75% Convertible Senior Notes due 2025 (the “Existing Notes”).
Scheme enforcement hearing
At a hearing before the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) on December 16, 2021, the Bankruptcy Court granted the Joint Provisional Liquidators’ motion for entry of a final order giving full force and effect to the Scheme in the territorial jurisdiction of the United States (the “Scheme Enforcement Order”). The hearing followed overwhelming support for the Scheme, including the previously announced unanimous approval for the Scheme by the voting creditors affected by the Scheme and sanction of the Scheme by the Cayman Court. The Bankruptcy Court entered the Scheme Enforcement Order the following day, December 17, 2021, which was a condition precedent to the effectiveness of the Scheme.
Luckin Coffees Scheme of arrangement becomes effective
Each of the conditions necessary for the Scheme to become effective following entry of the Scheme Enforcement Order has been satisfied. A copy of the notice of the occurrence of the Scheme Effective Date is attached as Exhibit 99.2 to the Current Report on Form 6-K furnished by the Company to the Securities and Exchange Commission today.
The restructuring contemplated in the Scheme is expected to become effective on or about January 28, 2022 (the “Restructuring Effective Date”). In the interim, the Company will complete the tender process with respect to the Existing Notes and related procedures and calculations necessary to distribute the consideration under the Scheme to the Scheme Creditors. To permit completion of these tasks, the latest day by which the Scheme must be implemented (the “Scheme Distribution Longstop Time”) has been extended to January 28, 2022, in accordance with the Scheme, provided that the Scheme Distribution Longstop Time may be further extended in certain circumstances. A copy of the notice regarding the extension of the Scheme Distribution Longstop Time is attached as Exhibit 99.3 to the Current Report on Form 6-K furnished by the Company to the Securities and Exchange Commission today.
“We are grateful for the overwhelming support of our creditors and the guidance of the Joint Provisional Liquidators throughout the proceedings in the Cayman Islands and the United States,” said Dr. Jinyi Guo, Chairman and Chief Executive Officer of Luckin Coffee. “The Scheme is now effective, which will allow us to implement the restructuring of our Existing Notes and begin the next chapter for Luckin Coffee. Our team remains focused on the execution of our strategy, delivering sustainable growth and profitability while providing outstanding products and services to our customers and meaningful value for our shareholders.”
Additional Information
In connection with the Company’s debt restructuring and the Scheme, Luckin Coffee is advised by Davis Polk & Wardwell LLP as legal counsel, Harney Westwood & Riegels as Cayman Islands legal counsel and Houlihan Lokey as financial advisor. The Joint Provisional Liquidators are represented by DLA Piper LLP (US) in the United States and Campbells LLP in the Cayman Islands. Holders of Existing Notes may contact Houlihan Lokey at HL_Lake@HL.com or the Joint Provisional Liquidators at luckin@alvarezandmarsal.com with any questions regarding the Scheme and related proceedings.
1 As previously reported, on July 15, 2020, the Grand Court of the Cayman Islands (the “Cayman Court”) appointed Alexander Lawson of Alvarez & Marsal Cayman Islands Limited and Wing Sze Tiffany Wong of Alvarez & Marsal Asia Limited to act as “light-touch” Joint Provisional Liquidators of Luckin Coffee (the “Joint Provisional Liquidators”). Luckin Coffee continues to operate its business under the day-to-day control of its Board of Directors and the supervision of the Joint Provisional Liquidators.
