Struggling tech giant LeEco sold more than half of its stake in Chinese phone maker Coolpad, according to local media reports citing official communication from the Beijing-based company. The move comes amid a major cash crunch that LeEco is having a hard time of enduring, with its 28.9 percent stake in Coolpad now falling to 11.07 percentage points just over a year after being strengthened. The sale netted the company the equivalent of approximately $103.24 million, though it's currently unclear whether the stake was offloaded to a single buyer or simply returned to the public markets. As a direct result of the development, LeEco lost the title of Coolpad's largest shareholder.
LeEco's investment in Coolpad came in two phases and saw the company spent approximately $488 million on just under 30 percent of the smartphone manufacturer, with its last investment being recorded in 2016. With Coolpad's general performance declining in recent years and given LeEco's financial troubles, the investment already saw it lose tens of millions of dollars, yet its current difficulties stemming from multiple debt defaults aren't allowing it to remain patient with all of its assets as it's under pressure to liquidate what it can. In a similar vein, LeEco has previously been looking to offload a number of commitments related to a valuable Silicon Valley property less than a year after buying it from Yahoo for approximately $250 million. It's currently unclear whether LeEco's sale of nearly a fifth of Coolpad will mark the end of the Cool 1 lineup of Android smartphones the two companies have been collaboratively developing.
The unenviable position of the Chinese company currently has no end in sight, with many of its subsidiaries still having their assets frozen due to multiple debt defaults and being unable to resume normal operations. LeEco founder Jia Yueting has recently been summoned to return to China and personally get involved in the process of settling the tech group's debts but has directly defied that order from the China Securities Regulatory Commission, stating he must remain in the United States in order to secure additional funding for electric car startup Faraday Future, another one of his ventures whose operations came down to a halt as a direct consequence of LeEco's cash crunch.