LeEco, the Chinese tech conglomerate, is planning to sell a prime property in Beijing to raise much-needed funds, according to a report from Reuters. The 50,000 square meter property in the eastern portion of the Chinese capital was bought by LeEco in May 2015 for $420 million and is currently held by its subsidiaries Beijing Fortune Times Co. Ltd and Beijing Baiding New Century Business Management Co Ltd. According to the Reuters report, LeEco is currently in the advanced stages of negotiations with a potential buyer, with the buyer paying a price higher than what LeEco originally paid for the property. Once the deal is closed, LeEco will receive much-needed cash in exchange of the subsidiaries owning the land, giving the company funds to invest in what it calls its core businesses: automobiles, smartphones, TV, and its sports unit, LeSports.
Aside from the widely publicized cash crunch LeEco is currently experiencing, the company is also facing more troubles back in its home country China. Zhou Hang, the founder of the Chinese taxi hailing platform Yidao Yongche, alleges that LeEco, which owns 70% of Yidao, used more than $180 million of Yidao's funds to pay for the tech firm's debts. Another of its divisions, its LeSports unit, is also in trouble after it lost the television rights to the Asian Federation Confederation matches, which occurred after LeEco allegedly failed to pay for the rights on time.
LeEco, a tech firm with business interests ranging from TV, content streaming, and smartphones to home appliances and electric automobiles, is having trouble with its cash flow after what the company admits as "growing too fast". To solve its cash trouble, LeEco has enforced several measures in order to raise funds. The most prominent of these measures are the cancellation of the acquisition of US television manufacturer Vizio, which LeEco originally planned to buy for $2 billion, and the sale of its property in San Jose, California to another Chinese company. LeEco has also retrenched a portion of its manpower in the United States, China, and India, with the tech firm making 175 positions in the US redundant. According to the Reuters report, LeEco has also scaled back in its expansion plans in Russia. All of these measures are important to raise cash given LeEco's failure to reach sales projections, especially in the United States. In the future, the Reuters report that LeEco will still expand its business internationally but will do it in a more disciplined manner.