Chinese content and devices company LeEco is finalising a CNY10 billion ($1.4 billion) investment from an unidentified strategic investor to shore up its depleted coffers, according to a filing by its Shenzhen-listed unit Leshi Internet Information and Technology.
Trading in Leshi shares was halted early in December, after a sharp drop in its share price reportedly triggered margin calls by brokerages and lenders. The company said the trading halt would be lifted soon, Reuters reported.
Jia Yueting, founder and CEO of the once fast-rising company, acknowledged that it had been expanding “too fast” and its capital and resources were not keeping pace, following an aggressive move into smartphones, smart TVs and electric cars.
LeEco announced in November it lined up $600 million in funding from institutional investors in China, and named a new head of APAC as it moved to shift its strategy away from rapid expansion.
LeEco was expected to announce major headcount reductions as its takes steps to reduce costs as part of its restructuring to rein in its soaring debt. In December its sports unit, LeSport, said it will cut 10 per cent of its staff of about 1,000 people.
Leshi, which is best known in China for its streaming video service, owes about $30 million to Super Sports Media Group, the exclusive holder of rights to broadcast English Premier League games in China, Reuters said.
The company broke ground last week on the first phase of an electric car factory in Zhejiang province with an annual capacity of 400,000 units, the China Daily said.