BEIJING, March 17 (Xinhua) -- Luckin Coffee publicized on its website late Tuesday that the company had reached agreements with major debtees to restructure its debt and enhance capital structure, reported the 21st Century Business Herald Wednesday.
On hearing the news, stock price of Luckin Coffee, which delisted from the Nasdaq market due to willingly revealed financial fraud in June 2020, rose nearly 20 percent in pre-market trading on the pink sheet market, an over-the-counter (OTC) market in the United States.
The coffeehouse chain said it would fulfill its debt obligations in near future and debt holders were expected to be repaid by around 91-96 percent of the par value of their holdings of Luckin Coffee-issued convertible senior notes.
The newspaper said the debt repayment move could cover a majority of the company's convertible senior note holders, whose holdings collectively accounted for about 59 percent of the principle of the notes.
Previously in January 2020, the company sold 400 million U.S. dollars of convertible senior notes offerings and the batch of notes will come due in 2025, when the company faces in total 460 million expiry debts.
In the meantime, the company is seeking financing via multiple channels and intends to raise at least 250 million U.S. dollars via private equity.
Guo Jinyi, chairman and CEO of Luckin Coffee, noted that the company had a feasible plan on Tuesday to bring itself back to growth and value creation. Its board and management team thought that the debt restructuring is in line with the maximum interests of the company and other stakeholders and the company would continue to take actions to consolidate its capital structure, according to Guo. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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