LeEco’s Listed Unit in Talks With China Construction Bank Over Unpaid Debt

The listed unit of the financially beleaguered LeEco said it is in talks with China Construction Bank (CCB) to restructure the repayment of a 200 million yuan ($29.75 million) loan, after it repaid 50 million yuan of the debt.

The debt-restructuring talk came shortly after CCB secured a Beijing court approval to freeze 250 million yuan worth of assets of Shenzhen-listed Leshi Internet Information & Technology Corp. The frozen assets include bank deposits and properties owned by Leshi, LeEco founder Jia Yueting and his brother Jia Yuemin.

Established in 2004 as a company that provided Netflix-like video streaming services, LeEco and its charismatic founder Jia went on to aggressively invest in smartphones, online video, entertainment and electric cars ventures. Jia boasted that LeEco would grow to challenge U.S. giants Tesla Inc. and Apple Inc. But his ambition hit the wall as a persistent cash crunch led to a flurry debt disputes and lawsuits. Apart from the CCB court order, a Shanghai court also ruled that China Merchant Bank could freeze 1.2 billion yuan worth of assets owned by LeEco subsidiaries and Jia for missed loan payments.

In a disclosure filed to the Shenzhen stock exchange, Leshi had paid off a one-year, 50 million yuan loan that was due on June 22. The remaining outstanding debt of 200 million yuan will be due on September 28, the company said.

According to Leshi’s financial reports, the company had 18.8 billion yuan in total liabilities at the end of March, equivalent to more than 55.9% of its total assets. About 1.98 billion yuan of its non-current debt will come due within a year, according to the report.

Leshi forecast first-half losses at between 637 million yuan and 642 million yuan. On July 21, the company appointed Sun Hongbin, chairman of its second-largest shareholder Sunac China Holdings, as Leshi’s new chairman.

Jia had stepped down from all posts at Leshi in July.

Contact reporter Dong Tongjian (tongjiandong@caixin.com)