Le.com, the listed company of tech giant LeEco Group, announced on Tuesday that it may not be able to complete the acquisition of LeEco’s affiliate Le Vision Pictures within 2016, NetEase Tech reported.
Earlier this May, Le.com announced the 100% acquisition of Le Vision Pictures, China’s leading movie producer and distributor, with RMB 9.8 billion (USD 1.5 billion). CEO of Le Vision Pictures, Zhang Zhao, believed that, instead of being listed independently, Le Vision Pictures can maximize its valuation by integrating into Le.com.
However, considering the changes since then, the acquisition is not expected to be completed within 2016. Read the public announcement by Le.com.
Last Wednesday, rumor spread that LeEco was in trouble, with a huge debt of over RMB 10 billion owed to its suppliers. LeEco responded immediately, stating that things were all on track, and that the rumor was a lie. This was supported by some of its suppliers, who confirmed to The Beijing News that they have been working well with LeEco.
Yet in the corporate letter that LeEco founder Jia Yueting wrote to his employees on Sunday, Jia mentioned that the supply chain of Le Pro3 smartphone did meet some trouble. LeEco plan to solve the problems by gathering LeEco’s own resources, introducing funding from investors, and quickly ending LeEco’s recent cash-burning expansion in order to refocus on making profits.
It should be noted that the LeEco Group consists of three parts: the listed Le.com, the unlisted LeEco Global, and the ecosystem of LeEco super car. The area that LeEco recognizes as troubled, i.e. LeEco smartphone, is not within the range of the listed Le.com.
In addition, Jia emphasized in his corporate letter to ensure investors that the current problems in LeEco’s unlisted areas will be solved within those areas, instead of drawing money from the listed Le.com.