(Yicai) Jan. 26 -- Luckin Coffee has reduced the registered capital of its subsidiary on the Chinese mainland to free up funds needed to expand the Chinese coffee chain's global footprint.

Luckin Coffee China recently reduced its registered capital to USD1.2 billion from USD1.6 billion, according to corporate data platform Qichacha. The unit was formed in March 2018 and is owned by Luckin Coffee Hong Kong.

The freed-up funds will be moved offshore to help boost the firm’s presence in other countries, build a global supply chain and support an internationalization push, the Xiamen-based company told Yicai.

The Starbucks’ rival only began to explore overseas markets last year and in March opened its first international outlet in Singapore. By the end of the year it had 30 coffee shops in the Southeast Asian nation.

Although coffee sales are growing faster in Southeast Asia than the global average, Chinese coffee chains face challenges in going overseas there, including competition from local coffee brands and differences in consumer tastes, said Zhang Chenkai, executive director at China Insights Consultancy.

Luckin Coffee has staged an impressive turnaround since it was booted off the New York Stock Exchange in 2020 for committing fraud. The firm logged a 87 percent jump in net profit in the third quarter last year from the year before to CNY988 million (USD139 million), while revenue soared 85 percent to CNY7.2 billion (USD1 billion).

In the three months ended Sept. 30, the company added 2,473 outlets to bring the total to 13,273, management said at the earnings call.

Editors: Dou Shicong, Kim Taylor