(Yicai Global) April 19 -- Chinese internet heavyweights JD.com Inc. and Tencent Holdings Ltd. are ready to invest CNY300 million (USD47.7 million) each in New Leshi Zhijia Electronic Technology Co. (NLZ), the smart TV manufacturing unit under cash-strapped Leshi Holding Co, as part of a new funding round worth CNY3 billion.
NLZ has received letters of intent from the two companies confirming their participation in the round, the Tianjin-based firm said in a statement. Other parties expected to take part include parent company Leshi Internet Information and Technology Corp., second-largest shareholder Sunac China Holdings Ltd., home appliance retail firm Suning.com Co. and TV maker TCL Corp., contributing fund injections to the tune of CNY300 million each.
Shares in Leshi [SHE:300104] hit the limit up, the maximum amount by which a price may advance in one trading day, following today's news, marking the second such spike in three days. The company’s stocks have reached CNY5.12 per share after hitting a close-to-five-year trough of CNY4.14 on April 16.
Some of NLZ’s suppliers have also agreed to swap their unpaid loans for equity in the firm, the firm said, adding that Leshi’s stake will decrease from 40.31 percent to 33.46 percent once the deal is completed.
Sunac became Leshi’s second-largest shareholder when he took over as the firm’s chairman from LeEco founder Jia Yueting last July. Jia has been living in exile from the Chinese mainland after racking up billions in debt after over-stretching in his efforts to make the tech conglomerate a preeminent brand across a multitude of platforms.
After resigning, Jia left for the US to focus on the development of Faraday Future, a new energy supercar startup. FF received investment from China’s third richest man, Xu Jiayin, chairman of property developer China Evergrande Group resulting in Leshi's share price spike on April 17.
Editor: William Clegg