China's Centurium Capital acquires controlling stake in Luckin Coffee
Source Centurium Capita
A leading Chinese private-equity firm has become the controlling shareholder of tainted Luckin Coffee Inc. after buying shares that were held previously by the company’s founders.
Centurium Capital announced last week that it has led a consortium to complete a transaction to purchase an aggregate of 383,425,748 Class A ordinary shares of Luckin Coffee from certain sellers. Other consortium members include IDG Capital and Ares SSG Capital Management.
Luckin, which is incorporated in the Cayman Islands, operates a large coffee chain in China and makes coffee vending machines. The company has been in a court-led “provisional liquidation'" following its April 2020 revelation that it had inflated its 2019 sales revenue by up to $310 million. That resulted in its stock price crashing, several executives being fired and a delisting from the Nasdaq exchange. The company filed for Chapter 15 bankruptcy in the U.S. one year ago.
“We are committed to supporting our portfolio companies to build sustainable business models, robust and transparent corporate governance and responsible management systems, and we will continue to support Luckin’s long-term growth and development," Centurium said.
