(Yicai Global) Nov.19 -- Chiefs of Leshi Internet Information and Technology, the listed arm of Chinese tech conglomerate LeEco, have shed some light on the cash-strapped firm's financial situation.
Leshi had over CNY5 billion (USD720 million) in debt to suppliers and service providers as of at the end of September, Zhang Wei, the chief financial officer of Leshi said, adding that loans from financial institutions, as well as other interest-bearing liabilities, amounted to CNY8 billion. This totals CNY13 billion (USD1.9 billion) in debt.
The Beijing-based firm has been in trouble since its founder Yueting overstretched his empire into billions of dollars of debt and then fled the country to work on his non-affiliated carmaker, California-based Faraday Future.
Bai Bing, the secretary of the board, considered the option of bankruptcy and stock market exit. Delisting involves that many factors align and that the firm is seeking ways to arrange the disposal but no specific measures have been disclosed, Bai added.
Leshi's [SHE:300104] stock has sunk from its peak this year, namely CNY15.33 (USD2.21) in January to close at CNY3.39 today.
The firm could not repay its dues of about CNY1.9 billion to Beijing Zhongtai Chuangying Enterprise Management on time, and thereby breached its contract. Zhongtai may take legal action to claim its rights.
Leshi has tried to negotiate with suppliers and seek government help and policy support, Zhang said, adding that no effective plan has emerged yet. The firm hasn't made any new progress in the debt problem, Bai added.
Leshi's net assets attributable to shareholders from January to September were CNY365 million below zero (USD52.6 million). Its net profit attributable to shareholders was negative CNY1.5 billion. Leshi's stock may be suspended its audited net assets have not picked up by year-end, the company said in a related warning on Nov. 8.
Jia Yueting had almost 1 billion stocks of Leshi, holding a nearly 25 percent stake, while almost 90 percent of those shares were pledged as of Nov. 7. This equity is frozen due to the fact that the government has blacklisted Jia.
Editor: Emmi Laine