China

LeEco-Backed Coolpad Sued by Ping An Bank Over Overdue Debt

Summary:

  • Coolpad Group (2369.HK) recently announced that its three subsidiaries have recently been sued by Ping An Bank’s (000001.SZ) branch in Shenzhen City, as reported by Cnstock.
  • Ping An Bank has asked Coolpad to pay off an overdue debt of RMB 80 million.

Why It Matters:

  • Defendants include the borrower of the RMB 80 million debt, Yulong Computer Telecommunication Scientific¬†(Shenzhen) Co., Ltd., which is a fully-owned subsidiary of Coolpad, and also the guarantors of the debt, including two other subsidiaries under Coolpad.
  • LeEco, which recently experienced a cash crisis, is Coolpad’s largest shareholder. In 2015, LeEco acquired a 17.9% stake in Coolpad for RMB 2.18 billion and in 2016, LeEco acquired an additional 11% stake for RMB 900 million and became Coolpad’s largest shareholder.
  • As SGI reported earlier, Leshi¬†Internet Information & Technology Corp. (300104.SZ), the publicly traded unit under LeEco, owes 12 Chinese banks RMB 2.24 billion, and the LeEco Group and its other units owe additional money to Chinese banks.