Debt-laden LeEco sells stake in Coolpad for huge loss
Chinese smartphone maker Coolpad Group announced on Thursday that its single largest shareholder Leview Mobile HK Limited had sold HK$807.7 million (over $103 million USD) in shares, reports thepaper.cn.
File photo of Jia Yueting, founder of LeEco [File Photo: VCG]
A subsidiary of the heavily indebted LeEco Group, the HK-based Leview Mobile sold 897,437,000 shares at HK$0.9 per share in cash, reducing its stake in Coolpad from 28.78% to 10.95%.
The buyer is said to be a company incorporated in the British Virgin Islands.
The share price at the time of the sale has meant Leview Mobile HK Limited lost 65% of the value of its original investment. It is believed the sale aims to provide LeEco with some of the cash it needs to meet its huge debt obligations.
LeEco has been struggling with financial problems since 2016 due to its aggressive expansion.
On November 17, 2017, Coolpad announced that Jia Yueting, founder of the cash-strapped LeEco Group, had resigned as the company's chairman.
Jia was ordered by Chinese authorities to return to China to deal with his company's mounting debt problems before the end of 2017, according to a circular issued by Beijing's securities regulator. But the 44-year-old company head posted on his Weibo account on January 2, 2018 that he will remain in the United States to build up his Los Angeles-based electric car company. His wife Gan Wei and brother Jia Yuemin are to be entrusted with full authority to deal with the debt issues of Leshi Internet, LeEco's publicly traded arm.
On January 2, it was announced that Jia had transferred the assets of e-commerce platform LeMall.com to Leshi Internet, in a move worth 92.9 million yuan.
Jia has been officially listed as a defaulter for repeatedly failing to comply with court orders.