Leshi falls by daily limit
Print Edition
SHARES of Leshi Internet Information and Technology, the listed arm of technology conglomerate LeEco, slumped by the daily limit of 10 percent at the market opening yesterday after the stock resumed trading.
The plunge came after a suspension since April last year, when the company said in a filing to the Shenzhen Stock Exchange that it was contemplating capital restructuring.
The planned deal to acquire a film arm from troubled LeEco was dropped due to the latter’s financial woes.
LeEco was in deep water in the past year as the company’s aggressive expansion into electric cars and other markets resulted in a rapid build-up of debt.
LeEco founder Jia Yueting was said to owe about 7.5 billion yuan (US$1.17 billion) to Leshi together with his affiliates, according to Leshi.
Jia, currently in the United States, was ordered by China’s securities regulator to return to China to deal with the mounting debt trouble.
Leshi said in a recent filing with the exchange that it had seen sharp declines in revenue and a surge in financing costs in 2017. It also claimed difficulty in collecting receivables and a tight cash flow situation.
The smart TV maker expected a net loss for 2017 and warned investors of operational difficulty.
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