LeEco plans sale of $420 million Beijing real estate
Chinese tech conglomerate LeEco is in talks to sell a prized property asset in the heart of Beijing it acquired in a $420 million deal last year, the latest effort by the electric car-to-smartphone behemoth to raise funds amid a severe cash crunch.
The company plans to sell either all or a majority of its Shimao Gongsan retail property in a popular area on the east side of Beijing by divesting from two firms it owns, two people with direct knowledge of the matter said. LeEco has been in talks with potential investors for some months now, the first person said.
LeEco, centred around a Netflix-like video platform operated by its listed unit, has been one of China’s boldest tech firms, ambitiously pushing into the U.S. market and looking to take on Elon Musk’s Tesla Motors in high-end electric vehicles.
The firm’s wide spread, however, led its billionaire founder and Chief Executive Jia Yueting to admit in November that it was facing “big company disease” and battling a cash crunch after expanding too fast.
The firm is now reining in its spending, looking to sell property in the United States and scrapping this month a $2 billion deal to acquire U.S. TV maker Vizio.
The two people said LeEco hoped to sell the 50,000 square metre Beijing property in the Sanlitun district by divesting from two firms it owns – Beijing Fortune Times Property Co Ltd and Beijing Baiding New Century Business Management Co Ltd.
LeEco bought the firms, which control the property, for a combined 2.92 billion yuan ($424.15 million) in May last year from Shimao Property Holdings Ltd.