Jia Yueting, chief executive officer of LeEco Global Group, poses for a picture at the company's headquarters in San Jose, California. (Photo : Getty Images)
Still reeling from last year's financial setbacks, China's tech giant LeEco has secured fresh funds amounting to 15.04 billion yuan ($2.2 billion) from real estate developer Sunac China Holdings, Reuters reported.
The announcement was made by Sunac last Friday, saying that it intends to splurge 6.04 billion yuan on LeEco's Leshi Internet Information and Technology Corp. Beijing via its property developer subsidiary Sunac Real Estate. If the deal pushes through, Sunac will have an 8.61 percent stake in the Shenzhen-listed unit.
The developer is also looking to invest more than 1 billion in Leshi Pictures, LeEco's film production arm. In addition, Sunac plans to acquire a 33.5 percent stake in Leshi Zhixin, Leshi Internet's subsidiary that is popular for producing smart connected TVs. This venture will amount to 7.95 billion yuan.
With this new venture, Sunac expects to boost its strength in areas like real estate, smart homes and intelligent hardware. The company has been looking for investment opportunies related to technological innovation in China.
For LeEco, the fresh funds can help alleviate some of the financial setbacks plaguing the company in recent months. Last year, LeEco's CEO Jia Yueting told shareholders that he would slash his annual salary to 15 cents due to a shortage of funds.
LeEco also had to postpone its plans to expand in India, axe about 1,000 employees and lower its advertising budget. The company admitted to burning its cash too quickly by splurging money on different ventures.
"No company has had such an experience, a simultaneous time in ice and fire," Jia said in a letter, obtained by Bloomberg News. "We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited."
LeEco's wide-ranging business empire covers smartphones, automobiles, TVs and sports media.
