Mubadala deal orders short, strong shot of Luckin
Context from the reported transaction
Mubadala Investment will make a minority investment in Luckin Coffee alongside the company’s controlling shareholder, private equity firm Centurium Capital, in a transaction valued at approximately $1 billion, the Abu Dhabi sovereign investor said on September 10.
It is investing in a newly created vehicle that holds 241 million shares, equivalent to a 9.3% economic stake, in Luckin, an SEC filing showed. Financing for the transaction will come from bank loans, against which the shares will be pledged as security. The SEC filing did not disclose how much equity Mubadala is investing, nor the duo's respective economic interests in the vehicle. Under the terms of the deal, Mubadala will have the right to appoint a member of the Luckin board.
Centurium, which holds about 48% of the voting rights in Luckin, first invested in Luckin in July 2018 but only took control of the company in 2022 after it was delisted from Nasdaq in 2020 following an accounting scandal.
