Leshi working to resume business operations
Leshi Internet Information & Technology is still coordinating measures with debtors and suppliers to “ease liquidity pressure and resume business”, the Shenzhen-listed firm which halted trading over heavy debt and asset integration in April announced today.
Leshi is considering asking Jia Yueting, 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 today in an online investor meeting.
Jia, who is now in the United States, didn’t show up to 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, Leshi said today.
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, still the biggest shareholder of Leshi, to return to China and sort out the mounting debt pile linked to his firms.
Jia was still the top shareholder of Leshi with more than a 26 percent stake, but his pledged stake may be dealt with when share price plunged.
Leshi is “close to resuming trading” with a forecast price of about 3.9 yuan, only a quarter of the 15.33 yuan before trading halted in April last year, media reported.