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UPDATE 1-Starbucks' China challenger, Luckin, set to raise $561 mln in U.S. IPO -sources

Joshua Franklin, Harry Brumpton and Julie Zhu

IPO -sources@ (Adds details of offer, background)

NEW YORK/HONG KONG, May 16 (Reuters) - Luckin Coffee Inc , the Chinese challenger to Starbucks Corp, on Thursday priced its U.S. initial public offering (IPO) at the top end of its targeted price range and sold more shares than planned in the biggest U.S. float by a Chinese firm this year, according to people familiar with the matter.

The Beijing-based coffee chain raised $561 million by selling 33 million American depository shares (ADS), more than the 30 million it originally said it would sell, at $17 each, at the end of an indicative range of $15 to $17.

Each ADS represents eight Class A shares, the company said in a filing with the U.S. Securities and Exchange Commission last week.

The pricing values loss-making Luckin, already backed by Singapore's sovereign wealth fund GIC Pte Ltd and U.S. money manager BlackRock Inc, at about $4.2 billion.

A spokesman for Luckin declined to comment. The people declined to be identified as the information was not yet public.

Luckin is due to begin trading on the Nasdaq stock exchange on Friday under the symbol "LK."

The IPO comes as Chinese-U.S. trade tensions involving tit-for-tat tariffs rattle global financial markets. In total, Chinese firms have raised $619 million in U.S. IPOs so far this year, down sharply from $3.7 billion in the same period in 2017, Refinitiv data showed.

The company has warned it may continue to incur losses in the foreseeable future. Last year, it recorded a net loss to shareholders of $475.4 million and total revenue of $125.27 million, according to the filing. For the first three months of 2019, it posted a net loss of $85.3 million. (Reporting by Joshua Franklin and Harry Brumpton in New York and Julie Zhu in Hong Kong; Editing by Peter Cooney)