(Yicai) April 1 -- Royole Technologies, a financially troubled Chinese producer of foldable screens for electronic devices such as smartphones, denied that it has filed for bankruptcy.

Royole “has not actively filed for bankruptcy, nor has it entered bankruptcy proceedings,” the Shenzhen-based firm said through its WeChat account today. “The company is still in operation.”

On March 29, information on data platform Tianyancha showed that three people with the family names Zhang, Wang, and Guo applied for bankruptcy for Royole and its units. But the company said the application was filed by former employees due to an options settlement dispute.

Royale will protect its employees’ legal rights and interests, the company said, adding that it will deal with the matter properly. 

Founder Liu Zihong declined to answer questions about Royale’s operating circumstances, referring Yicai to the firm’s official information.

Sources told Yicai that Royole’s predicament is partly due to fierce competition in China’s science and technology industry, with some firms paying more attention to technological innovation than to their own financial health and strategic planning.

Founded in 2012, Royole quickly gained a prominent position in the early days of the foldable screen market, but it lost out as more competitors joined in. Suffering from a lack of stable business partners, from 2017 to the first half of last year it lost over CNY3.2 billion (USD502.5 million) on operating revenue of CNY500 million (USD78.6 million).

According to information on Tianyancha, the company has debt in excess of CNY3 billion (USD414.9 million).

Royole had been expected to seek a listing on Shanghai’s Nasdaq-like Star Market at the end of 2020. The company hoped to raise about CNY14.4 billion (USD2.3 billion) from a valuation of CNY57.7 billion.

But after being included into the China Securities Regulatory Commission's sampling list, Royole withdrew its listing application in February the following year. Since then, it has been dogged by complaints about failure to pay staff wages.

Royole’s owners include Liu, who earned a doctoral degree in electrical engineering from Stanford University aged 26, Citic Capital Shenzhen Asset Management, and Shenzhen Capital Group.

Editors: Zhang Yushuo, Tom Litting