(Yicai Global) April 16 -- China's troubled Luckin Coffee has received a USD250 million injection from existing shareholders Centurium Capital and Joy Capital to complete its restructuring plan and to settle its accounting fraud charges in the US.

Centurium Capital agreed to subscribe to USD240 million worth of the coffee chain's convertible preferred shares via private placement, the Xiamen-based company said in a statement yesterday.

Joy Capital agreed to subscribe to USD10 million worth of such preferred stock. The two parties may invest an additional USD150 million with the same ratio under certain circumstances.

The transaction is subject to several conditions, including the completion of a debt restructuring arrangement between Luckin Coffee and investors who hold USD460 million in convertible bonds, according to the statement.

Last December, the Starbucks rival agreed to pay USD180 million to the US Securities and Exchange Commission for an accounting scandal that got it booted from the Nasdaq Stock Market. The SEC said Luckin “intentionally” fabricated over USD300 million in retail sales from April 2019 to January 2020.

Luckin, which has over 4,000 outlets across China, has outpaced Starbucks and Costa Coffee to become the largest java chain in the country. But following the scandal, it was ejected from the Nasdaq on June 29, 2020, ending a 400-day listing, at an ignominious USD1.38 per share, well below its USD17 issue price.

The latest private placement will enable Luckin Coffee to channel its existing funds toward business operations and to continue to expand its core coffee business to meet its long-term growth goals, the firm added.

On March 16, the company said on its website that it has reached a deal with major creditors to restructure and strengthen its capital structure so that its USD460 million debt would be due in 2025. Luckin Coffee will fulfill its debt obligations soon, it added.

At that time, the company was in talks with many investors to raise at least USD250 million through private placement, it added.

Editor: Emmi Laine, Xiao Yi