CICC Assists Luckin Coffee in Convertible Senior Notes Issuance and Concurrent Follow-on Public Offering of ADSs
On January 10, 2020, CICC, as the Joint Bookrunner, assisted Luckin Coffee Inc. (“Luckin Coffee”, NASDAQ: LK) in successfully completing its convertible senior notes issuance and concurrent follow-on public offering of ADSs. The convertible senior notes feature an offering size of US$400mm (US$460mm post-greenshoe, if fully exercised), a coupon rate of 0.75%, an initial conversion premium of 30%, a maturity of 5 years (investor put at end of 3rd year) and an offering price of 100%. Concurrently, 13.80mm ADSs (15.87mm ADSs post-greenshoe) were offered at a price of US$42/ADS (a premium of 20% to the pre-deal close), with an offering size of approximately US$580mm (US$667mm post-greenshoe, if fully exercised).
This is the largest combo transaction of convertible bond and follow-on offering of a US-listed Chinese company in the past three years, and achieved the highest file-to-offer/ file-to-last close premiums for ADS follow-on offering of Chinese Company in US market since 2010. Against the headwind from the escalating US-Iran tensions, the deal was enthusiastically welcomed and multiple times over-subscribed by global investors, with LK’s stock price surging by 26.4% from deal announcement to pricing.
Luckin Coffee is the largest coffee chain in China. With a mission of “to be part of everyone’s everyday life, starting with coffee”, and empowered by mobile Internet and big data technologies, Luckin Coffee has pioneered a disruptive new retail model to address the pain points in the freshly brewed coffee industry and provides the mass market with coffee, tea, juice, light meals, snacks and other products of high quality, high affordability, and high convenience. Luckin Coffee has become a well-recognized trendy FMCG brand, with 4,507 stores across China and over 40 million cumulative transacting customers as of the end of 2019. In January 2020, Luckin Coffee released its smart unmanned retail strategy to continue to build a closed-loop smart retail platform with its own traffic and products.
Since the inception of Luckin Coffee, CICC has been firmly supporting the client with international and professional services. This deal represents another landmark in CICC’s continuous services to the client following its US IPO in 2019 and another remarkable example of CICC’s all-round capital market services for high-quality new economy enterprises.