China's LeEco secures $2.2 billion for expansion from new investors
LeEco's new Le Pro3 phone is on display during a press event in San Francisco, California, U.S. October 19, 2016. RETUERS/Beck Diefenbach
TAIPEI Chinese tech conglomerate LeEco has successfully raised nearly $2.2 billion from new investors including Tianjin Jiarui Huixin Corporate Management Company and property developer Sunac China Holdings (1918.HK), stock market filings on Thursday showed.
Sunac China controls Tianjin Jiarui Huixin, LeEco's Leshi Internet Information (300104.SZ) said in an earlier filing.
LeEco founder Jia Yueting said in November that the company, which is involved in everything from smartphones to electric vehicles, faced a shortage of cash and had suffered from expanding too fast in too many directions.
The new investments will go into Leshi Internet Information, its smart internet TV subsidiary Leshi Zhixin, as well as LeEco's film production subsidiary Le Vision Pictures, Leshi said, confirming plans announced in January.
LeEco has also resolved an industry competition issue involving Jia Yueting and his wife, Gan Wei, who founded and owns a stake in the Chinese web TV and film firm Le Young Pictures, which could potentially rival the entertainment business within LeEco, the filings revealed.
Leshi said it will buy Gan's 47.8 percent stake in Le Young Pictures to comply with regulations.
Leshi also said its vice president Han Fangming would resign from its board to make way for a director to represent the new investors, with Liu Shuqing nominated by Tianjin Jiarui Huixin to become a non-independent director.
Liu is a high-level manager at Sunac China, according to her biography.
The various Leshi statements were expected as the company had promised more conclusive announcements.
Leshi's stock price soared earlier this week, after one of its suppliers Compal took a stake in the company's TV subsidiary, Leshi Zhixin.
Sunac China's chairman Sun Hongbin remarked this week that he'd have to wait and see about further investments in LeEco.
"We will if it's suitable, but if not then forget it. We're not a non-profit organization," Sun told reporters at an earnings press conference in Hong Kong on Tuesday.
Sun added that while he didn't fully understand the electric vehicle industry, he was nevertheless waiting for the entire sector to just take off.
(Reporting by Jess Macy Yu in TAIPEI; Additional reporting by Clare Jim in HONG KONG; Editing by Alexander Smith)