Money let LeTV take the lead again. On July 3, Levi’s chairman Jia Yueting and his wife Gan Wei’s bank deposits with a total value of more than RMB 1.2 billion were exposed by the bank’s freezing news. The funding problem was mainly caused by LeTV’s arrears on the bank. Currently, although LeTV has already repaid more than 10 billion yuan in loans to financial institutions, the non-listed system still has serious financial problems. There are also reports that LeTV's arrears on suppliers have reached 10 million. In recent years, Jia Yueting has cashed nearly 10 billion yuan in the stock market. These assets were either invested in LeTV or invested in enterprises. After the above 1.2 billion yuan of funds were frozen, what remained of Jia Yueting?
freeze
A document issued by the Shanghai Higher People's Court on June 26th was exposed. This document shows that China Merchants Bank Co., Ltd. Shanghai Chuanbei Sub-branch applied for property preservation from Shanghai Higher People's Court on June 26, and the application was ruled by the court to comply with the law.
The specific rulings of the court were: Freezing of Lefeng Mobile Hong Kong Co., Ltd., LeSports Mobile Intelligence Information Technology (Beijing) Co., Ltd., LeTV Holdings (Beijing) Co., Ltd., Jia Yueting, and Gan Wei Bank deposits totaling RMB 1.237 billion, or seizure. And seize other equivalent assets. The document states that the ruling will immediately begin execution. If it does not accept the ruling, it may apply to the Shanghai Higher People's Court for reconsideration within five days of receiving the ruling, and the execution of the ruling will not be suspended during the reconsideration.
It is understood that LeTV and China Merchants Bank have had close cooperation. In November 2015, Levision Holdings and China Merchants Bank Shanghai Branch held a strategic cooperation ceremony. The two parties will have integrated credit, cash management, financial consulting, international business, and many others. Achieve long-term strategic cooperation. Among them, China Merchants Bank Shanghai Branch will provide LeTV Holdings and its subsidiaries with a strategic global integrated credit line of 10 billion yuan to meet the financial needs of LeTV's domestic and foreign businesses.
LeTV Holdings responded to the Beijing Commercial Daily reporter that the asset freeze applied for by China Merchants Bank was caused by a Lenovo mobile phone business loan, but LeEco's asset collateral for the loan was sufficient to cover debt, and the company’s top management is also working with China Merchants Bank. In close communication with various financial institutions, we hope to resolve the relevant debt issues as soon as possible.
China Merchants Bank stated that the Shanghai Branch of China Merchants Bank applied to the court for asset preservation this time, which is a legal measure adopted by LeTV when its Leward Mobile Loan has incurred interest, and China Merchants Bank’s Shanghai branch has repeatedly failed to collect. After applying for asset preservation, the current business risks of China Merchants Bank Shanghai Branch and LeTV are in a controllable state, and follow-up does not rule out solving problems with LeTV through friendly negotiation.
Split
Beijing Business Daily reporter noted that the fuse started at LeTV. Jia Yueting acknowledged that due to Levision's lack of pre-judgment on liquidity management, the judgment of profit and loss is not accurate, resulting in follow-up funds not being followed in a timely manner, resulting in mobile phones appearing quasi-shock status in the fourth quarter of last year, which is also an experience of LeTV. lesson. Once, LeTV entered the mobile phone circle as a spoiler. In the early days of development, it captured a lot of fan support with ultra-high cost performance and unique ecological content. The annual sales volume exceeded 20 million units. In accordance with such a pace of development, music as the mobile phone to achieve "ecological dream" can be expected.
Unfortunately, since the introduction of a new generation of products in April 2015, when the LeTV is about to launch the 10th product, the Le Pro 3 dual-camera AI version, the new machine has not yet officially unveiled. The LeTV is due to the capital chain of LeTV. Into a quagmire of development. In the past period of time, LeTV has been dialed by two suppliers to collect debts. At the same time, there are news that LeTV is making layoffs, which will exceed 50%.
LeTV's problem is a microcosm of LeTV's unlisted system business crisis. According to Jia Yueting's statement at the general meeting of shareholders, “The capital problem of the non-listed system is far more serious than we think.†Therefore, LeTV is actively separating the business of listed companies and non-listed companies.
At the LeTV.com shareholders’ meeting held last week, Jia Yueting said that in the non-listed system, the automobile is the primary factor in the funding problem, and the mobile phone business is the second factor. In the better environment of the capital market, LeTV received more financial support. After the development of various business lines is very good, after the bad environment, the financial pressure of LeTV's three major business segments is too great. In April, the second funding After the advent of the crisis, LeTV will focus more on the non-listed system and will also deal with a number of fixed assets and even equity assets. When talking about future development, Jia Yueting reiterated that in the future, LeTV will focus on the listed system LeTV and automotive business.
Back road
Its realization in the market is more concerned that after the freeze of 1.2 billion yuan, what is left of Jia Yueting?
In the case of LeTV’s huge sums of money, Jia Yueting had cashed over 10 billion yuan in the past few years. Judging from the information disclosed by LeTV’s announcement, Jia Yueting had a total of three major reductions. From June 2015 to January 2017, in nearly one and a half years, Jia Yueting’s shareholding ratio fell from nearly 45% to 26.45%, and LeTV stocks that were held for less than two years were worth at least RMB 11.7 billion. In addition to reducing his holdings, Jia Yueting’s shares were used for equity pledges. Since 2013, Jia Yueting has pledged more than 38 shares, accumulating a total of more than RMB 31.1 billion.
According to the view given by the LeTV announcement, Jia Yueting insisted cash on cash: There are two cases: Jia Yueting said that all the cash amount will be lent to the listed company without interest and used for the daily operation of LeTV. The second is to introduce strategic investors and optimize the ownership structure of the company. However, as of December 31, 2015, the amount of interest-free borrowings provided by Jia Yueting to LeTV was only RMB 2.071 billion, which was far lower than the RMB 5.696 billion paid for the reduction of its shares in LeTV.
Compulsion
In November 2016, the LeSco system broke out with a capital crisis. Two months later, in mid-January of 2017, a total of 16.8 billion yuan of funds was used to help China Sunac. However, in the following six months, LeTV did not report good news to the three major sectors. On the contrary, the LeTV system continued to expose crisis events, and even in April, there was a second funding crisis.
The eruption of the LeTV fund crisis has also led to a series of problems, the first being the arrears to the banks and owed to suppliers.
Jia Yueting stated at the shareholders’ meeting last week that since the arrival of the funds last year, the loans Lenovo has repaid (including his personally secured loans) have reached 15 billion yuan. At present, the listed company system has seen a positive trend after six months of organizational structure, management, and business line adjustments. Short-term adjustments are also needed in the future. The capital chain of the non-listed company system is more tense than when the crisis broke out. “We would like to have an unlisted system. With more than 900 billion yuan coming in, theoretically, we should be able to completely solve the funding problem. Obviously, the results did not meet our expectations."
As for the reasons, Jia Yueting analyzed that because it did not make a good arrangement for the funds, “it reflects our Internet companies’ experience in dealing with liquidity risks in the hardware field. We still have inadequate experience.†According to Jia Yueting, LeTV has more than 100 billion yuan. The repayments were mainly repayments from financial institutions. They hoped to use limited funds to repay financial institutions, obtain trust and even support, but after repaying loans from financial institutions, financial institutions instead waited and watched, and even run, causing business lines to raise funds. When funds are repaid, they are affected. Since then, LeTV began to adjust its strategy and actively communicate with financial institutions.
A related person in the financial industry stated that the biggest problem with this matter is whether other banks will follow up on the behavior of China Merchants Bank. If other banks also apply for preservation, LeTV may face a “disastrous disaster†and the above 1.2 billion yuan in funds. After being frozen, Jia Yueting still has enough capital to pay back the debt. Song Bing, the founder of Pratt & Whitney Cultural Communications, believes that if the music industry has too many layouts, the capital chain has already had problems. Once again, the risk of refinancing has been reduced. It will not be known yet. In order for each company to truly become bigger and stronger, it must first sink in the field to do a good job of products, relying only on press conferences and new concepts to provide large-scale financing. It is also a manifestation of ignorance.
Beijing Business Daily reporter Sun Yuxiang Shi Feiyue