Luckin Coffee Completes Debt Restructuring, Emerges From Bankruptcy
Chinese beverage chain Luckin Coffee on Monday announced that the company has successfully completed the restructuring of financial debt and has emerged from bankruptcy proceedings under United States code. As a result, Luckin Coffee is no longer subject to bankruptcy or insolvency proceedings in any jurisdiction.
“Today marks a new beginning for Luckin Coffee,” said Guo Jinyi, Chairman and CEO of the company. “We will endeavor to continuously enhance our governance and internal controls and improve our product and service offerings.”
Luckin Coffee has fought a long battle to recover. According to a financial report released not long ago, total net revenues in fiscal year 2021 were 7.9653 billion yuan ($1.2499 billion), representing an increase of 97.5% from 4.0334 billion in fiscal year 2020.
GAAP operating losses in fiscal year 2021 were 539.1 million yuan ($84.6 million), representing a significant reduction in operating losses from 2.5873 billion in fiscal year 2020. Average monthly transacting customers in the fourth quarter totaled 16.2 million, representing an increase of 67.1% from 2020, setting a record high.
In addition to the firm’s steadily improving financial figures, Guo Jinyi wrote in an internal letter to employees in February this year that store expansion has entered the operation stage of “high quality and refinement.” In 2021, Luckin Coffee launched a total of 113 new ready-made drinks throughout the year. In January 2022 alone, Luckin had opened about 360 new stores. On Monday morning, Luckin and Coconut Palm Group Co., Ltd. jointly announced their annual new product, the “Coconut Cloud Latte,” which became a hot topic on Chinese social media.
SEE ALSO: Luckin Coffee Opens Nearly 360 Stores in January
In January this year, the Financial Times reported that Luckin Coffee was considering re-listing on Nasdaq, possibly as soon as the end of this year. If the firm can return to the Nasdaq, the abundant cash flow and financing would reduce obstacles to its continuous expansion. However, Luckin Coffee has so far denied plans to relist.