LeEco’s dream of breaking into the US market and competing against Apple is now farther from reality than ever before. The Chinese tech firm’s American operation has had a difficult year with missed payrolls, disappearing employees, and overall poor sales. But the latest development in LeEco’s financial woes is sure to make things go from bad to worse.
A Chinese court froze $182 million is assets tied to LecEco founder and chairman Jia Yueting due to unpaid loan payments, according to The New York Times. The ruling also affected assets linked to Yueting’s wife and three other LeEco affiliates.
The Shanghai High People’s Court made the ruling last week, which clamped down on the assets linked to loan for the LeEco’s private smartphone brach, Le Mobile.
LeEco began mounting debt in 2016 when it tried funding its US expansion by raising more than $6 billion. The heavy borrowing has taken a toll. Yueting admitted to shareholders last week that the company had made some mistakes with allocating funds.
“The cash problems at the nonpublicly traded businesses are more serious than when this crisis erupted,” Mr. Jia told investors, according to a transcript. “Our businesses are constantly using cash to repay loans, having a huge impact on their operations.”
LeEco has confirmed the frozen assets. According to the Times, the company has resources to cover the debt and will work with China Merchants Bank to repay it. [The New York Times]