Chinese coffee startup, Luckin Coffee announced it has successfully restructured its financial debt and has emerged from bankruptcy proceedings.
It has been two years since the tech-enabled coffeehouse chain was found to have fabricated millions of dollars in revenue which as a result, derailed its business.
The Xiamen-based company, which filed for bankruptcy and is publicly traded over the counter in the US as well, has new investors and stated it is well positioned for long term growth and better financial stability.
It is reported that Luckin plans to relist its shares in the US by the end of this year.
Last month, Luckin reported a 81% increase in quarterly revenue and operating losses of about CNY 120.8 million (~US$19 million).
“Today marks a new beginning for Luckin Coffee. We are confident that Luckin Coffee is well positioned for long term growth and creation of stakeholder value,” said Guo Jinyi, chairman and chief executive officer of Luckin Coffee.
History of Luckin Coffee
- Luckin Coffee was founded in 2017 and had positioned itself as a home-grown competitor to US coffeehouse chain, Starbucks.
- The company opened its first outlet in 2017 and operated more than 4,500 tech-fueled coffee shops in the country by the end of 2019.
- The company went public in 2019, raising US$864 million in equity as well as debt from investors.
- In April 2020, Luckin revealed that it had fabricated its 2019 sales revenue by up to US$310 million.
- The news resulted in its shares crashing and several top executives being fired.
- On 29 June 2020, Luckin shares on Nasdaq was suspended and delisted but it currently trades over the counter.
