Leshi shares fall by limit after resuming trading

Updated 2018-01-24 12:53:02 Xinhua

Shares of Leshi Internet Information and Technology, the listed arm of technology conglomerate LeEco, slumped by the daily limit of 10 percent at market opening Wednesday after the stock restarted trading.

The plunge came after a suspension since April last year, when the company said in a filing on the Shenzhen Stock Exchange that it was contemplating capital restructuring.

The planned deal to acquire a film arm from the troubled LeEco was finally dropped due to LeEco's financial woes.

LeEco was in deep water in the past year as the company's aggressive expansion into electric cars and other markets resulted in rapid build-up of debt.

LeEco founder Jia Yueting was said to owe about 7.5 billion yuan (1.17 billion U.S. dollars) to Leshi together with his affiliates, according to Leshi.

Jia, currently in the United States, was ordered by China's securities regulator to return to China to deal with the mounting debt trouble.

Leshi said in a recent filing with the exchange that it had seen sharp declines in revenue and a surge in financing costs in 2017. It also claimed difficulty in collecting receivables and tight cash flow situation.

The smart TV maker expected a net profit loss for 2017 and warned investors of operation difficulty.

Net profit attributable to shareholders slumped 435 percent year-on-year in the first three quarters and resulted in a loss of about 1.65 billion yuan.

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