Houlihan Lokey Advises Luckin Coffee

Houlihan Lokey is pleased to announce the successful restructuring of the $460 million convertible bonds (and holders thereof, convertible bondholders) issued by Luckin Coffee Inc. (Luckin).

Luckin is one of the largest coffeehouse chains in China, providing coffee and other food and beverage products via a store and mobile business model (grab-and-go coffee). The company launched its initial public offering on NASDAQ in May 2019, and at its height, had a market capitalization of $12.6 billion. However, the share price collapsed in early 2020 after the company announced its discovery that a portion of its revenues had been fabricated, which led to the company filing for a voluntary provisional liquidation to help facilitate a consensual restructuring of its liabilities.

Houlihan Lokey acted as the exclusive financial advisor to assist the company in reaching a restructuring deal with convertible bondholders, along with raising preferred equity financing and negotiating the global settlement of certain shareholder class action lawsuits.

On January 28, 2022, the company closed a scheme of arrangement in the Cayman Islands that restructured the convertible bonds (with parallel Chapter 15 recognition in the U.S. courts). Convertible bondholders representing approximately 97.7% in aggregate outstanding principal voted in favor of the restructuring.

The transaction has secured the following major benefits to Luckin:

• Cancelation of the existing convertible bonds, in exchange for:
  - $151 million of upfront cash.
  - $63 million of one-year notes.
  - $142 million of five-year notes.
  - 9 million of new ADSs.
• Global settlement with certain class action shareholder litigants for $187.5 million in cash.
• The injection of $250 million in new funding by existing shareholders.