Chinese coffee brand Luckin Coffee jumped 42 percent early in the session in the US pink sheet market as it reached an agreement with its main debt holders to restructure its debt and strengthen its capital structure.
Under the agreement, the noteholders are expected to receive 91-96% of the face value of the existing notes, the company said.
Luckin Coffee is actively using multiple sources to raise capital, "and is currently in a 30-day internal discussion with credible investors to raise at least $250 million through a private placement," it said.
On February 5, 2021, Luckin Coffee responded on Weibo to the news that the company will file for Chapter 11 bankruptcy protection in the US:
As an important step in the company's restructuring and a common practice under the Cayman process, the provisional liquidators filed a proceeding with the US court seeking the US court's approval of the provisional liquidation proceedings currently being conducted by the company in the Cayman Islands.
"This proceeding will suspend proceedings against the company in the United States and create the conditions for the orderly completion of the reorganization in the Cayman Islands."
The company and the stores are operating stably and everything is normal in operations and will continue to provide consumers with high-quality, cost-effective products and services, Luckin Coffee said.