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January 24, 2018

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Shares in Leshi to resume trading

LESHI Internet Information& Technology Corp, the listed arm of debt-laden LeEco will resume trading today after a nine-month suspension, the company said in a filing late yesterday.

The company is still coordinating measures with debtors and suppliers to “ease liquidity pressure and resume business,” the Shenzhen-listed firm said during a briefing to its investors yesterday.

After halting its trade over heavy debt and asset integration in April, Leshi is forecast to reach about 3.9 yuan (61 US cents), only a quarter of the 15.33 yuan before trading halted.

Meanwhile, Leshi is considering asking Jia Yueting, founder and still the company’s biggest shareholder, to use the non-listed electric car business to pay back the debt.

Jia and his related company still owes 7.5 billion yuan (US$1.15 billion) to the listed firm, Leshi said yesterday.

Jia, who is now in the United States, didn’t show up at the meeting. He is regarded as being responsible for the heavy debt after aggressive business expansion into the electric car and smartphone markets.

“The company will focus on solving pressure on liquidity and supply-chain issues at this stage so as to resume stable business operation,” said Sun Hongbin, who was elected chairman of Leshi last year.

Sun is also the chairman of property developer Sunac China. Sunac invested about 15 billion yuan in Leshi last year.

The company’s management is working with Leshi Internet’s second-largest shareholder, Tianjin Jiarui, to provide support for “sustainable business operations in future.” Leshi now focuses on major businesses like smart TVs, Internet video and film production, the company said yesterday.

Tianjin Jiarui is a company backed by Sunac China.

In the first three quarters, Leshi posted a net loss of 1.6 billion yuan, with expected losses for the whole year.

In December, China’s securities regulator ordered Jia to return to China and sort out the mounting debt pile linked to his firms.

Jia was still the top shareholder of Leshi with over 26 percent, but his pledged stake may be sold when the share price plunged.


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