Report: Bank Requests LeEco Subsidiary's Assets Frozen

LeEco is facing more financial troubles after the China Merchants Bank asked the authorities to freeze certain assets of the Chinese tech firm. The bank has reportedly submitted at least two separate requests to freeze the assets of certain subsidiaries of LeEco. One of the requests ask the authorities to prevent the Leview Mobile HK Limited from disposing or dealing with its assets, presumably until the company repays its loan with the bank. The second asset freeze request deals with the properties currently held by other LeEco subsidiary, the group's founder Jia Yueting, and his wife. This asset freeze request prevents Jia and his company to move certain assets amounting to more than $182 million.

The China Merchants Bank made the asset freeze requests to ensure that LeEco will repay the remaining portion of the tech firm's loan. LeEco, back in 2015, obtained a 10 billion Yuan ($1.47 billion) loan from the bank in order to finance the company's acquisition of the smartphone manufacturer Coolpad. This was the largest loan obtained by LeEco at the time. Aside from the said bank, other companies that have made deals with LeEco have taken additional measures to ensure that it will not be severely affected by the current financial state of the tech firm. Foxconn, a major Chinese manufacturing firm, sold its minority ownership of LeEco's most profitable subsidiary, the video streaming service Leshi Zhixin. The company is also facing increasing pressure from the wireless carrier China Mobile over late payments and Compal Electronics of Taiwan over debt repayments. The latter company also set aside its plans to invest in the company's video streaming firm, at least in the short term.

LeEco's founder has already hinted on the grim financial state of his company after saying that the company's cash problems are actually "far worse than expected". Despite the recent efforts made by the firm, it looks like the cash infusion from investors and massive job cuts across its subsidiaries failed to save the company from a worsening cash crunch. Whether or not LeEco will resort to even more drastic financial measures in face of the increasingly difficult business environment remains to be seen.

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Mark Real

Staff Writer
Mark Real has written for Androidheadlines since 2017 and is a Staff Writer for the site. Mark has a background in sciences and education. He is passionate about advancements on hardware and software technologies and its impact on people’s lives. Contact him at [email protected]
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