(Yicai Global) April 4 -- Leshi Internet Information & Technology Corp. [SHE:300104] explained its current perilous straits in detail in its reply to an inquiry letter from the Shenzhen Stock Exchange.
Leshi has pledged its shares of New Leshi Smart Home and will lose control of the company if it fails to timely repay the debts, it said April 1. Shenzhen Stock Exchange sent Leshi a letter March 30 asking whether the pledgees’ exercise of their security rights will cause the listed company to become an ‘empty shell.’
The company’s overall financing efforts are experiencing great difficulty, with cash flow extremely tight, and it will hardly sustain its operations without new funds, Leshi replied.
It will risk having negative net assets if it continues to suffer large losses this year, Leshi conceded. Most of its subsidiaries’ assets have been pledged by now, it said.