Tencent, JD.com eye TV business with investment in cash-strapped LeEco unit
April 19, 2018
Industry News
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Iris Deng
iris.deng@scmp.com
Celia Chen
celia.chen@scmp.com
Chinese internet giants Tencent and JD.com will invest in the television-making unit of the embattled entertainment conglomerate LeEco to complement their content and online retail strategies.
Tencent and JD.com intend to invest 300 million yuan (US$48 million) apiece to each receive a 2.5554 per cent stake, according to a document filed to Shenzhen Stock Exchange on Wednesday by the unit’s parent company Le.com, the Shenzhen-listed arm of debt-ridden LeEco.
Chinese television maker TCL and home appliance retailer Suning were also among the investors, making investment offers of the same size, according to the filing.
After the new fund injections Le.com will remain the biggest shareholder of the unit, officially known as Leshi Internet Information and Technology Corp, with a 33 per cent stake.
The debt-ridden Le.com encountered cash-flow problems in late 2016 stemming from an over-expansion of its business into smartphones, sports entertainment and even electric cars. In July last year Sun Hongbin, chairman of the country’s fourth largest developer Sunac China, replaced LeEco founder Jia Yueting as chairman in an effort to turn the indebted company around. After committing more than 16 billion yuan in investments and loans last year, Sun stepped down last month after he refused to make further financial commitments.
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Iris Deng
iris.deng@scmp.com
Celia Chen
celia.chen@scmp.com
Chinese internet giants Tencent and JD.com will invest in the television-making unit of the embattled entertainment conglomerate LeEco to complement their content and online retail strategies.
Tencent and JD.com intend to invest 300 million yuan (US$48 million) apiece to each receive a 2.5554 per cent stake, according to a document filed to Shenzhen Stock Exchange on Wednesday by the unit’s parent company Le.com, the Shenzhen-listed arm of debt-ridden LeEco.
Chinese television maker TCL and home appliance retailer Suning were also among the investors, making investment offers of the same size, according to the filing.
After the new fund injections Le.com will remain the biggest shareholder of the unit, officially known as Leshi Internet Information and Technology Corp, with a 33 per cent stake.
The debt-ridden Le.com encountered cash-flow problems in late 2016 stemming from an over-expansion of its business into smartphones, sports entertainment and even electric cars. In July last year Sun Hongbin, chairman of the country’s fourth largest developer Sunac China, replaced LeEco founder Jia Yueting as chairman in an effort to turn the indebted company around. After committing more than 16 billion yuan in investments and loans last year, Sun stepped down last month after he refused to make further financial commitments.
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