(Yicai Global) Aug. 17 -- China Minsheng Trust Co. has reached a settlement with debt-laden Leshi Internet Information & Technology Corp. Beijing [SHE:300104], better known under the LeEco brand as LeTV, to unfreeze CNY1.2 billion (USD180 million) in bank deposits, the listed company said in a statement on Aug. 16.
Leshi Zhixin Electronic Technology Tianjin Co., a Leshi subsidiary, signed a deal with Minsheng Trust in 2016, with the latter offering the firm up to CNY1 billion in loans through trust products. Leshi Holding Beijing Co., LeEco's holding firm, and founder Jia Yueting provided unlimited joint liability for the loans.
The trust later applied to Beijing Municipal High People's Court to freeze bank deposits belonging to Leshi Holding, Leshi Zhixin and Jia. However, it has now struck a deal with the debtor and applied to cancel the freeze, which if successful will mean Leshi's current period and future profits should go unaffected, the listed firm said.
Courts have frozen almost all of Jia's 524 million shares in LeTV, which were valued at CNY30.68 (USD4.6) a share when trading was suspended. Total equity held by Jia and Leshi Holding are worth around CNY16 billion (USD2.36 billion).
Leshi Zhixin owes a total of CNY13.85 billion to financial institutions, an investor told Securities Daily in July. Debts due include CNY2 billion to Ping An Bank Co. [SHE:000001], CNY1.75 billion to China CITIC Bank Corp. [SHA:601998, HKG:0998], CNY1.5 billion to Avic Trust Co., CNY1.4 billion to Zhongtai Specialty Financing Holdings Ltd., CNY1.2 billion to China Merchants Bank Co. [SHA:600036, HKG:3968], CNY1 billion to Minsheng Trust and CNY1 billion in commercial bank loans.
The debtor has sufficient assets to cover the debts. It has holdings in LeTV, Coolpad Group Ltd. [HKG:2369], LeTV Sports Culture Development Beijing Co., short term projects in the pipeline and other assets worth between CNY30 billion and CNY40 billion, according to conservative estimates.