Luckin Coffee Inc (LKNCY)

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Goldman Sachs & Co.: Enforcement on up to 76,350,094 ADSs of Luckin Coffee Inc.
Business Wire Business Wire•April 6, 2020
Following an Event of Default under a Loan Secured by Shares Underlying such ADSs

Following the occurrence of a default by Haode Investment Inc. (the "Borrower"), a shareholder of Luckin Coffee Inc. (the "Company") (NASDAQ: LK), under a US$ 518 million margin loan facility (the "Facility"), a syndicate of lenders, as secured parties under the Facility (the "Lenders"), has instructed Credit Suisse AG, Singapore Branch as security trustee, to exercise the Lenders’ rights with respect to the collateral securing the Borrower’s repayment obligations under the Facility. A total of 515,355,752 Class B ordinary shares and 95,445,000 Class A ordinary shares of the Company have been pledged to secure the Facility, including shares additionally pledged by an entity controlled by the family trust of Ms. Jenny Zhiya Qian, the Company’s CEO.

The Borrower is controlled by the family trust of Mr. Charles Zhengyao Lu, the Chairman of the Company’s Board of Directors. The Facility is full recourse to Mr. Lu and his spouse.

In connection with the exercise of their rights under the Facility, the Lenders have commenced the process of enforcement against the collateral in order to satisfy the Borrower’s obligations under the Facility, including the conversion of Class B ordinary shares of the Company into American Depositary Shares ("ADSs") of the Company. There are no applicable lock-up restrictions in respect of the Class A ordinary shares or the ADSs of the Company (collectively, the "Securities"). Assuming that all Securities pledged under the Facility were sold, Mr. Lu’s voting interest in the Company would not decrease, but Ms. Qian’s beneficial and voting interests would decrease significantly.

The Securities are freely transferable under the federal securities laws, and no registration of the Securities under the federal securities laws is required for the offer or sale of the Securities. The lenders, acting through a disposal agent, expect to effect sales of the Securities in one or more public market and/or private transactions, depending on market conditions. No assurance can be given how many sales will occur and no disposal agent will have a commitment to purchase any Securities. Various affiliates of the lenders might be the purchaser(s) of the Securities. No prospectus or other offering document will be used in connection with any sale of the Securities and neither the Company nor Mr. Lu will be involved with, or otherwise participate in, any such sale; sales will be made by the disposal agent solely on the basis of public information.

Any person interested in the purchase of the Securities may direct enquiries to the disposal agent at the contact details set forth below.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200406005488/en/

Contacts

Benny Adler
Goldman Sachs & Co. LLC.

Phone: [phone]