LeEco in distress as financial crisis worsens

Chinese tech group LeEco, which has interests ranging from smart cars to online content, is facing growing pressure from its creditors and business partners, with one bank wanting some of its assets frozen by a Shanghai court over late payments.

The latest financial woes have surfaced days after its founder and CEO Jia Yueting said the conglomerate's cash problems were "far worse than expected" and that billions of dollars in funds raised in recent months were not enough to help it ride out the crunch.

China Merchants Bank Co Ltd said in a statement it had applied to have some of LeEco's assets frozen because a subsidiary, Leview Mobile HK Limited, had been late on making interest payments on a loan.

"CMB's Shanghai branch repeatedly urged repayment without success and so sought to use legal means," the bank said, adding it now had risks related to the loan under control and did not rule out using "friendly talks" to resolve the issue.

LeEco, which controls smartphone maker Coolpad and its core listed smart TV unit Leshi Internet Information and Technology Corp, has been battling huge financial pressure since Jia admitted last year the company had expanded too fast and was facing "big company disease".

Several local media outlets this week reported CMB's Shanghai branch had successfully applied for an asset freeze against some of LeEco's subsidiaries, Jia and his wife, totalling 1.237 billion yuan ($182 million).

A LeEco spokesman said CMB's asset-freeze application concerned "financing loans related to LeEco's smartphone business", but added LeEco had enough collateral to cover the loan.

"Our senior executives are currently in close communication with various financing units of CMB, and we hope to resolve the related debt issue very soon," he added. LeEco also hopes to raise further cash to help the firm "get back to normal", the spokesman said.

Faced with the worsening cash crunch, LeEco has put some of its global properties for sale, cut staff numbers, and is planning a restructuring to fold some business units into Leshi Internet.