LeEco in Talks on $1.4 Billion Support, Starts Electric Car Plant

Cash-strapped Chinese technology conglomerate LeEco is in talks on securing a CNY 10 billion ($1.4 billion) deal with an unnamed strategic investor, its listed unit said.

Leshi Internet Information and Technology said in a filing to the stock exchange late Wednesday that its parent company had signed a framework agreement with the investor and the two sides were still discussing the final details.

It did not disclose the identity of the investor, but the China Business News cited a source familiar with the situation as saying that it was an insurance company.

LeEco has been expanding aggressively in a range of businesses including online entertainment, electric and driverless cars and smartphones, but the firm's billionare chief executive Jia Yueting warned staff last month that it had grown too fast and was facing cash shortages.

Soon after, the company said it had secured commitments for $600 million to support its automotive unit and LeEco high-tech business.

LeEco also launched a new electric car plant in eastern China's Zhejiang province on Wednesday, the official China Daily reported.

The newspaper said the first phase of the new factory would cost CNY 11 billion  ($1.58 billion) to build and would produce 400,000 e-cars every year.

Following the cash crunch, the firm's sports broadcasting unit said it would cut 10 percent of its staff and restructure its business.

This week, LeSports still owed as much as $30 million in payments to the Beijing-based Super Sports Media Group, which holds exclusive rights to broadcast English Premier League games in China.

© Thomson Reuters 2016