Secoo, L Catterton Asia, JD become strategic partners
Secoo Holding, Asia''s largest online integrated upscale products and services platform, is now a strategic partner of L Catterton Asia, the Asian unit of the largest and most global consumer-focused private equity firm, and JD.com, China’s largest retailer. Secoo has got a US$175 million investment as three-year convertible note from L Catterton and JD.com.
Pursuant to the convertible note and warrant subscription agreement, L Catterton and JD will subscribe for a convertible note with the principal amount of US$175,000,000, convertible into certain number of Class A ordinary shares; and a warrant, which entitles L Catterton to purchase from the company 500,000 American depositary shares of the company, two of which representing one Class A ordinary share of the company. The principal amount outstanding under the Notes will bear interest at an aggregate compounded rate of 8 per cent per annum until the third anniversary of the closing of the transaction, or such earlier time as the notes are repurchased or converted prior to such date (the Maturity Date), subject to the payment schedule specified therein. The notes can be converted into the company’s fully paid Class A ordinary shares and the warrants can be exercised any time after the first anniversary of the closing of the transaction and prior to the close of business on the second business day immediately preceding the Maturity Date.
The transaction is expected to close in the near future, subject to customary closing conditions. L Catterton and JD together will have the right to appoint a director and an observer to Secoo’s board of directors until the third anniversary of the closing of the transaction and for so long as they hold 5 per cent of Secoo’s total issued shares thereafter on a fully diluted and as-converted basis.
Concurrently with the entries of the convertible note and warrant subscription agreement and other related transaction documents, Secoo and L Catterton have entered into a business cooperation agreement to enable Secoo to access L Catterton’s network of luxury leaders and strengthen relationships with world’s leading luxury brands. L Catterton will also strategically support Secoo on a range of initiatives, including enhancing its presence and operating efficiency.
“We are excited about this strategic partnership with L Catterton Asia and JD,” said Richard Li, chairman and chief executive officer of Secoo. “L Catterton is the leading consumer-focused investment firm in the world, and JD is China’s largest retailer and the leading e-commerce giant in China. By establishing relationships with leading partners in the consumer, luxury goods and e-commerce spaces, Secoo is poised to gain invaluable name recognition and further boost the company’s reputation in the international luxury consumer space. Through this partnership, Secoo will be able to leverage L Catterton and JD’s operational expertise and vast resources to expand and deepen our market presence not only in China, but across the globe.”
Ravi Thakran, chairman and managing partner of L Catterton Asia, said, “We are thrilled to enter into a partnership with Secoo, the luxury e-commerce leader in China. E-commerce continues to play an increasingly important role for consumers across all demographics, and as evidenced by our investment, we believe that Secoo is one of the strongest high-end platforms for the Chinese consumers. We look forward to working together with Richard and his outstanding team to take Secoo to the next level and continuously build out the platform for high-end consumers.”
“This partnership will help us enhance our luxury capabilities and provide the best possible luxury shopping experience to consumers in China,” said Shengli Hu, president of JD Fashion and Lifestyle. “Chinese consumers are increasingly discerning about their luxury purchases, demanding more variety and choice than ever. As we look to continue to meet this demand, we see many potential areas for future collaboration with Secoo.” Monday, 16 July 2018